How do you plan for CapEx?

[Timothy VanWingerden]

Obviously capital expenses don't happen the same way we save up for them so I'm curious as to how you all plan for them in your investments. Do you religiously allocate a certain % of rental income per month for CapEx?

I am currently planning for CapEx by treating it like an emergency fund. I analyze each of my properties and determine an amount to save based on their condition and upcoming repairs. Then, when there is a repair where I need to spend money from my CapEx savings, I use ALL of my cash flow from all my properties to cover for the expense until the fund is saved back up.

Here is what I have so far in my portfolio: 

Quadplex 1 - 2 units rehabbed, 50% of systems upgraded (water heater, HVAC, etc) - $10,000 set aside for CapEx.

Quadplex 2 - 2 units rehabbed, 50% of systems upgraded - $10,000 set aside for CapEx.

SFR - Completely rehabbed, updgraded systems, $4,000 set aside for CapEx.

Total: $24,000 set aside for CapEx.

If any repair is needed, I will use the $24,000 saved for CapEx and then use all available CF to save the fund back up to $24,000. Once I have the $24,000 saved, I will use all the available CF to save for the next deal.

Thoughts?