budgeting replacements and improvements

[Colleen Fiumara]

What do you safely budget monthly for replacements and improvements of a multi family such as appliances, roof replacement, renovations, appliances, countertops, additions, etc?  I have a client looking at a 12 unit apartment building, 12 stoves, 12 fridges, 12 dishwashers, 2 large water heaters, 12 garbage disposals.

[Curtis Rouse Jr]

@Colleen Fiumara A rule of thumb I use is based on a 30% return based on the total cost per unit. For example, If I'm putting $5k into 1 unit, I plan on increasing the rents by $140 to return the capital I put into the unit. This ultimately comes down to desired returns and if the area will support the rent increase. I have implemented this strategy with my apartments with no problem capitalizing. If it doesn't make sense to spend the money without returning your capital, then why spend the money. I hope this makes sense and best of luck to you and your client!