When do you replace working items?

[David Segal]

I have a house flipp with two fully functioning HVAC systems. They are on the older side (each at 15 years), but they both work perfectly fine. The potential buyer that i have under contract is asking me to replace them for new units Because the inspectoe said they are older. At what point do you replace them?

[J Scott]

A few years back I came up with the "75% rule" of thumb that I use for capital expenses. Basically, if a capital item is more than 75% past its typical useful life, I will replace it for a retail flip.