I keep a capital expenditure account for the big issues, but the rest goes into equity.

You should also set aside money as a reserve for vacancies, turnover costs, bad renters, or capital expenditures (roof, flooring, and other big expenses).

if a PM has a % on repairs or rehabs, higher or lower or even doesn’t have (but its vendor recognize a 10% under the table) their interest will go thru bringing and finding repairs to do.If PM will be in charge of the finance and keep the budget aligned, it wouldn’t be the one who handles/hire/have interets in any expenditures.

Then add in the capital expenditures if you keep the property long enough.

Also, keep in mind that you should have enough profit (NOI minus principal and interest) to be able to realize a reasonable rate of return and still be able to set aside some money for capital expenditures - for example, money for new roofing, paving repairs for drives and parking areas, etc.In the end, you have to get to the other side of analysis though.

You could consider REITS, Private Placement Deals, Hard Money Lending, Syndications, etc. and invest passively, or continue acquiring hard assets that come with heavier time expenditures.  

A thorough inspection is crucial and understand the difference between maintenance and bigger capital expenditures (capex) that you will need to save for. 

What you would normally want to do is establish your own escrow account for Repairs/Maintenance, as well as Capital Expenditures for your rental.  

I know labor costs are cheaper in the south than what they are where I am at in the NW.... see what they charge on average per sq/foot to build.A couple positive aspects to new builds that are often over looked are very low capital expenditures for a 10-15 year time period after the build.

2) Balancing Upgrades/Capital Expenditures (CapEx) Against Over-Investment:This is indeed a delicate balance.