Calculating CapEx [Calc Review]

[Samir Patel]

I have a quick question about how others are calculating CapEx on a rental property investment. I'm currently factoring in about 8-10% for CapEx depending on the age of the property and the neighborhood. I recently came across a video where the investor was discussing the pitfalls of CapEx if not calculated correctly and how many investors under budget for this. I'll link the video below, but basically he was itemizing expenses based on their lifespan and replacement cost for the area and coming up with a monthly CapEx amount based on this. I think this makes sense since this will be the actual costs when you go to replace said items, but this will put my CapEx projections at nearly 20-25%.

Link to Video

Here's an example for illustration:

Purchase Price: $100k

Rent: $1000/mo

Link to BP Calculator

Itemized Expenses Based on Replacement Cost and Life Expectancy

Based on the replacement cost and life expectancy, I would need to factor in about 20% CapEx which would account for all the expenses over the time period while I'm holding the property. Is this correct? Am I doing something wrong here? Are most investors just under budgeting for CapEx? Any advice would be greatly appreciated :)

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*This link comes directly from our calculators, based on information input by the member who posted.