How much do you budget for CapEx and Repairs on single family?

[Parker Smith]

I am interested to hear from real-world investors on how much you budget for Capital Expenditures and Repairs into their single family, buy and hold rental properties. It's obviously very difficult to find cash flowing properties in this market and I'm curious about who follows Brandon Turner's advice on setting aside $180 per month for CapEx + $50 for repairs. I've also read HOLD by Gary Keller who recommends 3-6% of monthly rental income. (roughly $90 per month in my market) A huge difference from the $230.

[Jim Adrian]

It helps to inventory the condition of the place and note remaining life expectancy on equipment.   Ie AC&Furnane is 10 yrs old so it has 10-15 yrs left. Replacement cost at ~$7000.  So $7000 / 10 yrs = $700,  $700 / 12 months = $58.   But this depends on the condition of the house and not everything will break at once.  Remember to look at the numbers and see what you can buy for that amount.  % may need to be higher due to buying power.

I use 10% for capex, 10% repairs, 6% vacancy (1 month of mortgage and utilities) and 10% PM.  I like to keep at least 5-10% of the property value on hand.

Here is a link to typical life expectancy of items.

www.nachi.org/life-expectancy.htm