Buy and Hold Investing - Replace Big Tickets immediately or wait

[David Longhini]

I have a property I'm looking at, and if I win the bid I'll be under a 203K to either completely renovate the roof and furnaces, both of which are okay but probably have a 3-5 year lifespan. 

The property itself would be ~190,000 winning price plus up to $45,000 in repairs and would bring in roughly $2800 in rental income. I'm cash strapped and trying to begin early as an investor at 23 with roughly $20,000 for Buy and Hold. The question, in your personal opinion should I replace the big ticket items immediately or wait until further down the line and stable. The difference is a mortgage for roughly 200,000 vs. 236,000 with that rental income. 

[Andy Robison]

I'd get just the Roof. AC get it serviced by a professional every year and it'll likely run for 20 more years. with the oddball $200-300 repair. Or I might just be spoiled by my HVAC guy. Prices may vary.

[Donald M. Davis]

You can also look into Home Warranties that will cover HVAC for an additional fee.  I don't see that as a long term solution but it can work for a year or two until you are ready to replace yourself.  If it goes bad under warranty they will replace.  Need to ensure though your HVAC coverage is inclusive for replacement.

[Mindy Jensen]

If the roof has 3 years left, I'd wait. 3 years is a long time. I like @Andy Robison's idea to get it serviced by a pro. 3-5 years is a long time to save up for capex. I don't have experience with a 203K, but look at a streamlined 203k rather than a standard 203k. I don't know the timeframe necessary for using the funds, though.

[John Thedford]

I would wait. If a roof costs 15K and has a life span of 15 years, replacing it 3-5 years early is giving away 3K-5K. Be SURE and put back funds for replacement though.

[Andrew Graves]

Originally posted by @David Longhini:

  but probably have a 3-5 year lifespan. 

I'm a builder by trade and I would have a hard time telling you an asphalt roof or some HVAC equipment have 3-5 years of life left in them. If they are in working order and not showing erosion or failing often I would not replace them. Plus, neither will significantly interrupt the lives of tenants when/if they do get replaced. Another reason to leave them for later. 

[David Longhini]

Thanks for the advice everyone, I did find out that it looks like there's enough issues with the roof to need to get that replaced, and getting the HVAC checked out in the next hour or so.