Turn Keys projections for management fees, vacancy, maintenance?

[Jeremy Hackenberg]

Hello,

Looking at some Turn Keys projections for management fees, vacancy, maintenance they project 8%, 4%, and 4% respectively while my calculations are for 10%, 5%, and 5% on my calculators.  Am I overestimating costs or are my numbers a good safeguard against the unforeseen when running a projected deal?

[Rob Hakes]

@Jeremy Hackenberg

Also make sure you are figuring in any lease up or tenanting fees.  This is a hard cost that does not get included into the PM fees typically and does not go away.  This should add another 3-4%for a lot of turnkey companies.  Also don't calculate your vacancy based on just a percentage.  Find out their average length of stay, average turnover cost, and average months on the market, and then come up with a conservative estimate on that.  

Also prepare for taxes to go up.  Depending on market, it is very possible that once a county sees a bunch of out of state investors start to own houses in their jurisdiction it can become a feeding frenzy for revenue.  I saw two of my turnkey properties have taxes jump by 40-50% after only owning for a few years.