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Updated over 7 years ago,

User Stats

18
Posts
9
Votes
Joseph Dzwiniarski
  • Investor
  • Woburn, MA
9
Votes |
18
Posts

How much do you normally budget in Reserves

Joseph Dzwiniarski
  • Investor
  • Woburn, MA
Posted

I just closed on a newly built 6 unit multi-family apartment. Everything was built and installed 2 years ago and is immaculate condition. Now here in lies the problem. The HVAC systems are all high-efficiency  and need proper maintenance once a year for flushing of the systems. Additionally, the fire suppression system will need to be maintained and signed off every two years. That costs $ (hoping to learn how to maintain most of the HVAC systems in the future).  If any of these systems breaks down that will cost some $$ too. Since I'm viewing this property as a long-term hold, I built in a pretty hefty maintenance and reserve budget of $8k (about 7% gross rents) assuming in 10 years i will need to replace/maintain these high efficiency systems. 


Are there any good tips on how to better estimate reserve costs for new apartments? Do you think I'm going a bit overboard/underboard in my estimates?

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