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Updated over 3 years ago,

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1,033
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Stephen Brown
  • Real Estate Broker
  • Huntsville, AL
872
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1,033
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How much do you set aside?

Stephen Brown
  • Real Estate Broker
  • Huntsville, AL
Posted

I'm purchasing a duplex for $90k and it rents for $1350 total, but I'll raise rents to $1400.

In regards to variable expenses I'm setting aside $100 for repairs (7%), $115 for capex (8%), and $70 for vacancy (5%).

The home was built in 1912 but the seller has updated many big ticket items such as the roof and flooring.

I'm just wondering if you believe this is too aggressive or not enough. 

This deal meets the 1% rule easy but my Cash on Cash return doesn't hit 8% when I throw in the property management fee, water bill, and lawn care. So I will most likely manage myself.

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