More Accurate Pre-Purchase Calculations (Focus on Repairs/Maint)

[William C.]

As I "run the numbers" to estimate the cashflow potential of a property, a sticking point for me has always been accurately representing the Vacancy Rate and the Repairs/Maintenance costs. The Vacancy Rate is something I get from asking local property management companies what they typically experience for similar rentals. I understand they have an incentive to under-represent this figure. The figure I struggle with is a number for projecting monthly Repairs/Maintenance. For quick calculations I always represent this number as a percentage of the monthly rent.

Example: Monthly Rent = $2000 - Repairs/Maintenance = 15% - Estimated Repairs/Maintenance Budget = $300 per month

I have heard rules of thumb ranging from 5 to 15%. I understand much of it will come down to the age and prior upkeep of the property. I also understand erring on the side of caution is important. I am curious to know how other investors go about estimating as accurate a number as possible while never "fudging" the numbers. Thank you taking the time to answer.