How to budget for maintenance cost

[Grace C.]

Hi, I know "it depends" but in general how should I estimate maintenance cost of a property? 

I'm seeing a 100-year old house "completely renovated, systems and cosmetic" in 2011. Is there some sort of guideline that I can follow to budget the maintenance cost for an old house like this? (It's a remote location and I'll hire a management company or handyman to service it).

Thank you so much!

[Antoine Martel]

5-10% is a good number

[Andre P.]

It's usually done as a percentage of your rent payment, and would probably depend based on having an inspection done.

In general people set aside 10% of gross rent for management, 5-10% (or even more) for routine maintenance, and the same amount for CapEx unless you know something needs to be replaced sooner.

Provided the renovations on this house were done completely and correctly I would use between 5-7% for repairs and maintenance.

[Jim D.]

My experience is that between 5-10% of gross rent is a good number. Depends heavily on the condition of the major systems. If the HVAC, roof, plumbing supply AND drain lines, and foundation are all updated and verified to be in good shape, you'll come in much closer to 5%.

One thing that also affects this percentage a lot is the price of the home. An $80k home and a $400k home (assuming they are the same size) cost about the same to repair. So on the cheaper home, those repairs represent a much higher % of your gross rents.

[Michael Cashman]

Thank you this helps