Updated over 8 years ago on . Most recent reply
Cap ex and maintenance on a recently flipped property
Anyone have any advice on what percentage to put aside for cap ex and maintenance for a property that has recently been flipped. It is a duplex and i am trying to run numbers to see if it will work. I want to be realistic with my number and wasn't sure if the percentage should change with a recently re-done property. The property is in Ogden Utah if that helps. Thanks
Most Popular Reply
Some of it depends on how many units you have, but it's usually assumed to be around 6 months per unit.
This will cover you for major issues.
Yes, a new boiler for $6,000 will be depreciated, but you still need cash to pay for the unit and have it installed. A new roof might be $8,000 to $10,000. So, you try to get to the 6 months in reserves level when possible and tuck away anything you can.
You also have to consider that you'll eventually need to update kitchens and bathrooms at some point to maximize potential rents.