How do you guys keep your capex and reserve accounts?

Question

Hey guys how do you keep your capex/vacancy/repair/reserve accounts? Do you guys create a different account for each property to keep track of it better? Do you keep different accounts for capex and a different one for vacancy? One for small repairs perhaps?

Thanks so much

Matt M. · Answer

@Mahmoud Y. Elhalawany

I don’t feel it necessary to have a spread sheet like that. I have an account that rents get deposited in, and anything that gets spent for properties including repairs, taxes, etc comes out of that account. We don’t touch it for any personal uses. It’s just money for the properties.

Alexander Krasuski · Answer

Hi @Mahmoud Y. Elhalawany,

I have a schedule that estimates the needed funds for a repair. Every month I have to manually change the Life Used column. I have one of these schedules for each property and the Needed column from all flow to another sheet that gives me a guess on what I need in cash reserves for an absolute catastrophe.

Alexander Krasuski · Answer

I am just using Excel.

With the Total number that is calculated from all sheets, I know how much of my long term cash savings I have to keep in that account. It is not separate from other long term cash savings.

Max T. · Answer

@Mahmoud Y. Elhalawany

I use a separate operating account for each property but I have one online savings account with ally bank that I use to hold capex money from all properties. Each operating account is set up to make monthly auto deposits into the capex account.

Mahmoud Y. Elhalawany · Answer

Thanks Alex, are you using Excel or a more real estate oriented software package? And are you placing the capital expidentures in separate bank accounts from say the vacancy funds?

Peter Tverdov · Answer

CapEx is 8% of our annual rental income deposited into an account the beginning of each year to last the entire year.

Reserves are cash and equities NOT credit, I find that crazy that people consider credit a reserve when it can be frozen or taken away by a bank.

Mahmoud Y. Elhalawany · Answer

Thanks so much guys

Alexander Krasuski · Answer

Anytime Mahmoud!

Mahmoud Y. Elhalawany · Answer

Perfect thanks so much Alex!

How do you guys keep your capex and reserve accounts?

Most Popular Reply