Set up my maintenance reserve budget when I bought my first property and honestly never touched the number again. Just kept saving the same amount every month.then I actually looked at it properly last month and realized the number I picked three years ago made no sense anymore. The roof was newer back then. The water heater wasn't. Everything's aged differently since, but my monthly set-aside is exactly what it was on day one.
curious if this is common or if I'm just bad at this. Do you all revisit the number periodically, or does everyone set it once like I did and forget about it until something breaks?
Look at it at least once a year, and any time something big gets replaced. A new roof or water heater moves that number more than anything else. After 15 years doing the books on about 90 units, what made it easy was a plain list of every major system and the year it went in. With that in front of you, adjusting the reserve takes ten minutes instead of a guess.
Investor · Hatboro, PA · Member since 2016 · 2k+ posts · 845 votes
12h
Very common. Like @Richard Cieplechowicz said, I’d revisit it once a year. The fact that you caught it before something broke puts you ahead of plenty of landlords.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
11h
You don't just look at the numbers, you need to physically look at the various reserve elements for new signs of impending failure. Corrosion around the seams of the water heater. Significant loss of the granular top coating of the shingles. Signs of corrosion at exposed sections of waste and supply lines. Exterior paint looking thinner in some areas or from one particular exposure. Mortar cracking or popping out of masonry or tile work. Corroded, damaged, bent, cooling fins on AC condensers. Cracked caulking.
Your useful life tables give you the statistical useful life, but local environment and preventative maintenance determine the actual useful life. For this reason you must visually inspect every element annually, and determine if a preventative action would effectively prolong an element. Adjust your schedule according to current observations.
In addition to that, you need to adjust your estimated cost basis up each year to account for inflation. This does not mean you need an estimate every year, but research your locale for your best judgment of the local inflation rate you experience and adjust accordingly.