What input % do you input for estimated repairs/maintenance?

Question

I’ve seen everything from 5, 10 percent of gross rents and recently seen some use 1 percent of the home purchase price as their input.  Curious what you use? On a similar topic, what best practices do you put in place when repair costs run high?

Rick Bassett · Answer

We budget 1 rent payment per year

Nathan Gesner · Answer

The national average for home repair costs is 10%. If the cashflow of your rental depends on scraping a couple dollars from maintenance, then it may not be a cash-flowing property.

Greg M. · Answer

This is something that no one on these forums can give you an accurate answer to. It depends 100% on the property. A 100 year old SFR that last saw renovations in 1970 is going to be very different than a 3 year old condo that has a wonderful HOA and fully funded reserves.

Check out a HOA Reserve Study and use it as a template for your property. You can easily get an idea of how much you should be setting aside for repairs and renovations and be able to anticipate when a big expense will occur.

Charles Carillo · Answer

@Amir Navabpour

For repairs and maintenance, it is usually around $500-$900 per year (per apartment); but, it all depends on the age and condition of the property.

Bruce Woodruff · Answer

10% gross rents sounds about right.....it might even be low depending on the condition of the house when you're starting out. Has it been recently remodeled? Or is it old and needing an update?

What input % do you input for estimated repairs/maintenance?

Most Popular Reply