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Updated over 8 years ago,
Is maintenance and repair costs proportional to RE cost?
I'm looking into different markets for a buy and hold strategy. One thing I wonder is if the cost of maintenance in different areas is proportional to the cost of real estate. For example, if the houses are cheaper in a certain area, would the cost of repairs be lower than it would be in a higher priced area? Should I be putting away a greater percentage of my rents for repairs/maintenance depending on the area?
I ask because I'm looking at some of the most positively reviewed turnkey companies on turnkeyreviews.com and many of the properties they have simply don't cash flow at all if you use the 50% rule. Obviously they don't believe you need to put away that big of a portion for repairs/maintenance. Maybe they are selling terrible investments, maybe that's how their market actually is. What do you guys think?