Maintenance/CapEx Assumptions for a Condo

[Benjamin C.]

Hello all,

I was wondering what cost assumptions people use for Maintenance and Cap Ex when calculating CAP and COC returns expectations for condos. For a SFR I typically use 15% of rent to cover both items.

However I've been thinking this is probably aggressive for a condo with a HOA. Of course it will be case by case, but if the HOA is covering the routine maintenance to the exterior, which should significantly reduce those costs. There always is the risk of the dreaded special assessment. But, if the HOA is well run, they should be building a reserve fund to cover cap ex items outside of your condo as well.   And if the HOA isn't well run, that's a whole other problem. 

Curious folks thoughts on this. 

Thanks

Ben