10% Repair -- Does anyone stay under this ?

[Westin Hudnall]

As a buy and hold investor - I have budgeted the typical 10% for repairs but find it nearly impossible to stick to that amount. The majority of my properties are fairly new (all built since 1970 with 5 of the 9 built since 1990) . If an investor gets $1000/month rent one yearly water leak ; a sprinkler issue; garage door issue; and a few lights not working properly can eat up your 10% repair costs (not to mention more serious issues that can advise) . All investors must have a lot of similar issues come up over the course of a year.

Maybe it's just me but unless we want our properties to deteriorate and have a lot of deferred maintenance I find it nearly impossible to stick to this:

Please advise with any thoughts

[Jay Hinrichs]

@Westin Hudnall 

  the reality is: it is what it is.. and your dead on .. you cannot predict what your operating expense's for maintenance are going to be.. many use 10% as a number but remember were are those numbers coming from.. Mainly from those that sell these investments. and for a fresh rehabbed house ( as long as its done right) probably fairly accurate.

But there are issues you can't control like weather, tenant , dogs , etc etc. 

What we have is investors buying SFR's for rentals... And when they buy them many times they do not have any operating history. As opposed to if you were buying say 4 plex's those the seller would have documented or should have documented operating cost over several years so you can see what to expect.

So based on your portfolio track it for a few years on the portfolio as a whole and see were you send up.. probably 10 to 20% is my guess as long as you don't have a tenant trash a unit then all bets are off.

I know with our portfolio ( I sold out in Oct 13) we had 350 rental homes of which 225 or so were sec 8... expense's were far higher than 10% average HUD turnover yearly alone was right at 10%.