Variable Landlord-Paid Expenses in Bigger Pockets Calc

[Michael Greksa]

I am working on my first deal focused on SFR in Charlotte metro area. I have been evaluating multiple deals using the Bigger Pockets rental property calculator, i have been assuming the following:

Vacancy: 5%

Repairs and Maintenance: 5%

Capex: 5%

Property Management Fees: 5%

With these assumptions, all my analysis are cash flow negative. This is in part due to strong Charlotte real estate market. Are these assumptions too conservative, especially if I plan on doing my own property management in the beginning? 

[Matthew Tringali]

 Hi @Michael Greksa . I own a property management company in Charlotte and also invest in SFR rentals here. I have a spreadsheet that I use to create a budget for my landlords. It is not the most detailed spreadsheet, but does a good job. The assumptions that I use are variable depending on the quality of the property. Here are my thoughts on each of your items:

• Vacancy: 5-6% is a good assumption in the first year. Assuming you have a good property that stays rented for multiple years, your vacancy rate will actually be lower. Properties that rent for around $1100-1600 fit this sweet spot and a pretty likely to be good multi-year rentals. If you are looking at properties lower than $1000 or higher than $1600 then your vacancy rate may be higher.


• 5% is a fair standard number for repairs and maintenance. Of course, if you are buying an older property and expect more maintenance calls, this number may be higher.

• 5% is too low for property management fees.  You should shop around to some management companies to get a specific idea of what number to use here.  This number, as a percentage, may also vary depending on the rental price point.

• CapEx, in my opinion, there is not a good predictable assumption for this as it is totally property dependent and would need to be plugged into your calculator once you have identified a property.

Once you start to narrow it down to any specific properties, feel free to reach out to me and I would be happy to help you nail down more specific numbers for that property.