A reputable heating and air company has a special now to replace both units entirely including all heating and air components for just under $7500 (7352.57) we are holding onto the properties long term. 

In the CapEx calculations, I had accounted for the following: Roof, Water Heater, All Appliances, Driveway, HVAC, Flooring, Plumbing, Windows, Paint, Cabinets/Counters, Gutters, Structure/Foundation, Landscaping, and Components (garage door, etc).Please refer to the questions below:1.

There is no value add component.- Not sure why you are assuming only a 1% property value increase.

That premium you are getting disappears with some of the major components being at end of service life.

I always have a thorough inspection completed and a report or SOW that identifies the condition and estimated life expectancy of major components.  

You need to take the expected useful life of a mechanical item or building component and set aside that percentage of the replacement cost each year (i.e.

We sold off our retail component of that PUD to Goldman, however the turnover  and vacancy rate can be very high in that area due to the number of student residents. 

This amount will allow time to get a new qualified  tenant and make the property ready to be re rented without being in a rush to accommodate the tenants desire to move and break there lease at will,  to my detriment.  

@Joel Owens I agree a full inspection of the house needs to be done to determine the condition of the necessary components.

It's one of the key components in real estate acquisitions.