When investing in a new area, how do you guestimate expenses?

[Account Closed]

Hey BP!

So I was creating a deal analysis on a property and realized I did not truly know the average cost of water, electricity, gas, etc for the area. This popped a question in my head on how to find out that information?

What is your preferred method of finding out average prices for expenses when analyzing deals?

Thanks ahead of time!

[Ralph R.]

@Account Closed

Yikes man your scaring me!!  you NEVER guesstimate any expense when doing a real estate analysis.  The only guesstimating to be done is when you are deciding weather or not to take the time to look any further into a property.  Once you decide to check it out EVERY NUMBER is a  real number.  If you say your going to use a percentage for an expense (management or vacancy or Cap-ex) then you over estimate and save that money in your reserves account weather you use It or not.  you can adjust it after you've owned the property a couple years, only after your reserves grow to an acceptable amount.  The property has to pay after you do your analysis using all your real numbers and your percentages.  There is no guesstimating!

RR