Analyzing multi-family: how much to allocate for repairs?

[Edita D.]

Hey guys! 

I am playing with the numbers to see if Pittsburgh is a market we want to invest in.

When analyzing the property, how much do you allocate for repairs/maintenance costs for older buildings in Pittsburgh?

Here's what I am taking into Expenses:

-P&I (principal and interest)

-Tax

-Insurance

-Prop mng 7% (since it's a multiplex)

-Utilities

-Vacancy 10%

-Repairs/Maintenance 5-25%

Logically, if it's a newly rehabbed property I'd do 5% for maintenance. Most Pittsburgh's buildings were built in 1900-1920 though... Do you go on a building by building basis to determine the % allocation for repair/maintenance?

Thanks!

[Rich Becker]

I agree with the above. The property I bought was close to turn key. I allocated 6% R&M and 7% Capex. Older property would probably kick it up a little bit.