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Updated over 8 years ago,

User Stats

74
Posts
24
Votes
Andrew Bauer
  • Atlanta, GA
24
Votes |
74
Posts

Analyzing a deal with low vs high quality tenants

Andrew Bauer
  • Atlanta, GA
Posted

From what I've read and heard (and from common sense) it seems there is an inverse relationship between the quality of tenant and typical repair/turnover costs. Higher quality tenants tend to do less damage to a property, are less needy, etc. 

When analyzing a potential deal, what methods do you use for integrating this expected difference in repair/turnover cost into your analysis of the deal? For example, when high quality tenants are expected, budget 5%-10% of rent for repairs, but maybe push it to 15% for properties were lower quality tenants are expected? Or is there a better way to think about this?

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