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Updated over 7 years ago,

User Stats

251
Posts
290
Votes
Paul Bowers
  • Real Estate Investor
  • Macedon, NY
290
Votes |
251
Posts

Using a % of rent to calculate CapEx seems wrong to me

Paul Bowers
  • Real Estate Investor
  • Macedon, NY
Posted

I'm brand new at this but it seems that using a percentage of the rent to set aside for CapEx doesn't seem to make sense. Let's assume I buy two different 1,500 square foot houses and one rents for $2,000 per month and the other rents for $800 per month. A furnace, a roof, water heater, etc will cost the same in either house but I've accounted for 2.5 times the money for one property over the other. Is there a better way to look at this?

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