Capital Expenditure Forecasting

[Fletcher Caulk]

I am purchasing my first rental property in Memphis, TN (Bartlett area) and am trying to come up with the numbers for that area for capex that I should be setting aside after a rehab (assuming all the items are new, will need to tailor for the specific property I find). I have the Book on Rental Property Investing and they have a table in there: 

Item - Cost - Lifetime

Roof - $5k - 25 yrs

Water Heater - $600 - 10 yrs

Appliances - $1k - 10 yrs

Driveway - $5k - 50 yrs

HVAC - $3k - 20 yrs

Plumbing - $3k - 30 yrs

Windows - $5k - 50 yrs

Paint - $2.5k - 5 yrs

Cabinets/Counters - $3k - 20 yrs

Structure - $10k - 50yrs

Garage door - $1k - 10 yrs

Landscaping - $1k - 10 yrs

Total: $183/month 

Does anyone have any practical experience with coming up with capex numbers, or have recommendations for how to estimate these? I do plan to buy/hold, but I theoretically could not worry about the 50/30/20 yr lifespan items if I think I'd be trading up properties after 15 years. Thoughts?

[John Leavelle]

@Fletcher Caulk

For the initial analysis you can use 10% for CapEx. However, once you have the property under contract you need to have it inspected. The inspection should tell you what the condition and life expectancy of all major components and appliances are. For those items not included in your Rehab plan you can create a more accurate CapEx reserves requirement.