Also your allocated monthly expenses are quite low. Cap ex and maintenance each month combined are $50. That's a tight estimate unless most every cap ex item is in great condition.
Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Ramiro Rodriguez whenever the maintenance and Capex budget is expected to be that low, I allocate a reserve fund for the property. At $25 per month if you did have a Capex item occur it would massively distort your calculations.
For example, if the AC went out 1 year in. You allotted for only $300 annually for Capex. An AC replaced on the cheap at $4000, that's 160 months of your allocated Capex budget, just slightly over 13 years.
The point being, the budget allotment is so low it cannot account for many mistakes and takes a disproportionate amount of time to recover. But if you set $2500 or more (I put $5000) aside as a reserve Capex fund you can run numbers tighter as you have already 'paid' for the Capex upfront with your reserve amount.