Is 80% ratio between expenses and rent too high ?
Hello,
I've a deal that came across my table for which the expenses are 80% of the annual rent. What is the recommendation as per the 50% rule ? Should I avoid deals that have too high ratio of expenses and rent ?
Please advise.
Thanks,
Navin
Most Popular Reply
@Jeff B. Aha, that would make more sense if you didn't allocate CapEx for future within rents collected.
I would say most wouldn't have proper reserves when purchased. Of course, every detail counts so it makes it an imperfect science. I like to update mine from the get go but still allocate future rents, to each their own of course.