Vacancy and capex(capital expenditures) big ticket items like roofs and floors.

What about vacancy and capital expenditures?

Any subsequent expenditure of funds to pay for repairs is treated as though the taxpayer received cash and paid for the repairs after completion of the purchase.

The purchase price would be $150,000I plan on using FHA or conventional financing through a small local bank, the Property is currently being remodeled and should be rent readyI’ve accounted 8% - repairs and maintenance 8% - Vacancy9% - capital expenditures 10% - management fees I think this might be a little much for expenses but I want to run the numbers conservatively.

@Nathan Carter We can definitely work with that to provide her with predictable expenditures monthly.

Management decisions that are relevant in determining whether you actively participate include approving new tenants, deciding on rental terms, approving capital or repair expenditures, and other similar decisions.

I am looking at some apartment complexes and I can't see a path to profit for long term buy and hold at the current loan rates and spreading realistic capital expenditure across each month, UNLESS rents rise fast, which is possible, if we continue down the path of labor shortage.

The “Core Personal Consumption Expenditures Index,” a key inflation indicator, rose a faster-than-expected 3.1% in April as price pressures built in the rapidly expanding U.S. economy, the Commerce Department reports.

The past is no guarantee of the future, sure, but what I think you will find in Indy or Cleveland is that in some months and years you will actually be cash flow negative due to maintenance, capital expenditures, vacancies and other mischief. 

In addition to the 6 months recommendation, keep in mind that some of those expenditures are predictable on a timescale... ie if you have a 10-year-old roof vs a 1-year-old roof, you know that you have a major expense coming up.