How much do you set aside for CapEx, PM, maintenance, etc.?

[Farshad Mansouri]

Thanks in advance for your help,

I am looking to BRRRR.

I was wondering What percentage of the mortgage amount would you set aside every month to cover the eventual cost of taking care of a property. Numbers I’m specifically looking for are the following, but please add to the list with your recommendations:

Vacancy (10%?)

Cap Ex

Maintenance (10%?)

Prop Management

Utilities that you are covering

In other words, I want to find a property where the rent covers the mortgage, as well as all those expenses because eventually they will come up.

[David Barnett]

If you are planning to BRRRR a property, I would bring the percentages for maintenance and Capex way down (depending on level of renovation). If you update most of the items during the rehab, you should have at least a few years with no/minimal repairs or capex expenses. I would also try to pass off utilities to the tenants, if allowed where you are investing. Vacancy at 10% is probably a bit high. I would ask a local, reputable property manager of the vacancy rate in the area where you are investing. I would also look at the property management fee in the area and back into it.