I'm just starting this thread to give newbies some perspective on the necessity for CapEx reserves. My tenants of 3 years just moved out and they were pretty "dug in" so to speak. This property was my very first rental. I bought it in 2008 with a no money down VA loan and I lived in it with my family for 4 years during my Navy time in Jacksonville. It has been a rental since 2012 and the tenant who just moved out was only the second tenant. This tenant was under property management (while I lived out of state) and there were no red flags until now. The rent was always on time and we conducted several short notice inspections during their tenancy with no major surprises. As you can see the photos below, they did not keep a tidy house and they managed to sneek in a large dog as well. My move-out rehab will include: full exterior pressure washing and repainting, full interior repainting, removal of all carpet (and replace with tile), resodding the backyard, filling about 50 nail holes, re-installing hardwired smoke detectors (they removed all of them), and landscaping. Total move-out work is going to run about $3,000-$4,000 with some of that going towards upgrades (like bluetooth smart locks, new hardware, new door knobs, etc).

All of the bad things being laid out, my wife and I are excited to get the property turned over and get the rents jacked up to market rates (from $1100 to $1395).