Many of your expenses are low. I never go below 8.34% (one month rent) for Vacancy reserves.
What condition is the property in? Like new? If not you need to increase CapEx to cover potential major repairs. I would use 10% until the property is inspected to determine the current condition of all major components and appliances. Then you can adjust it accordingly.
I would also have Repairs at 5%, PM at 10%, and Misc at 5%.
Investor · North Miami, FL · Member since 2011 · 10 posts · 2 votes
8y
I am very familiar with the condition of the property. the seller and I use the same property manager who charges me 5% because he manages 12 other units for me. He also provided me with the monthly P & L for this property. The seller has replaced all of the airconditioning units recently and updated all of the kitchens. There is a value add available by converting the one bedrooms into two with permits. My two 4-plexes next door is basically the same floor plan and is about 30 sq ft smaller.