I was surprised by the amount of long-term costs I calculated and even more surprised by what my biggest costs were going to be!!!! I also learned about better ways to estimate long-term expenses. Flooring and interior paint, over a long period, were going to KILL me! (actually, I'll be OK - but I was almost shocked by how high they were relative to roof, etc.
How do you estimate long-term costs? % of rents? $/unit/yr? $/sq ft? An estimate based on the specific property? (I kind of like them in reverse order..)
You can download the full presentation & excel file here:
Some takeaways, then more info..
•Use a Cap Ex estimate that makes sense for your circumstances
•Some average costs can be estimated over a long period if the time is taken to get realistic cost information for individual property.
•Don’t confuse a good method of comparison (like % of rents) with a good method of estimation (like $/sqft or per/unit costs)
•Floors, Interior Painting, & Kitchens can cost more than Roofs, exterior paint, & appliances over the long term!
•Consider ways to mitigate these costs, such as durable flooring; durable, easy-to-clean & hard-to-notice-errors paint & color; tenant wear & deposits;
â¢Surprised there weren't more savings for 4plex vs SFR!
After a discussion with @Anja Wehrmann about long-term capital expenditure costs, I decided to make an estimate for my property over the long term. And these were the results. I shared them with my meetup group in San Francisco last Thursday.