How much do condo HOA fees reduce capex / the 50% rule?

[Neil Quinn]

Hi all,

I'm looking to see how close to breakeven I could get with some property in my area if I ever move out, but mostly would only be able to afford condos that have $300-$600 HOA fees.

Can people give me a sanity check of what expenses on a property like this might look like?  Let's assume an 800-900 sqft condo.

Property management - maybe 8-10%

Expenses - Very tough for me to estimate, would love to see some sample models from people

Vacancy - would probably just assume ~ 8% or 1 month of rent

Capex - Since HOA would probably cover roof/exterior type deals, capex here would likely be just bigger items like HVAC, water heater,

Q1:  Per above, I assume capex is generally lower when HOA fees cover some of those items?

Q2:  Also, in general, do places in higher CoL areas tend to run lower on expenses/capex?  My thought is that if the median unit (let's say 800sqft building with $200k mortgage) has an equivalent building in a higher cost of living area (800sqft, $400k mortgage), the expenses should still be -roughly- the same.  Yes, contractor labor in the area might be a bit more, but materials shoudn't change much.  Basically, do you think higher CoL area might be closer to a 40% rule instead of 50%?