Set Asides For Rental Repairs?
Dear Group,
What is a reasonable amount of money to set aside for repairs on rental houses? A fixed dollar amount ($25 or $50 per unit per month?), or a percentage of the rent?
Thanks.
Bob
I keep a $10K reserve for all my rental properties. Until you build up an adequate reserve fund, contribute whatever amount you feel comfortable with each month.
But is there a dollar amount or percentage which most folks have found reasonable over the years?
I ask because, in evaluating properties to purchase, I'm trying to figure out the projected net cash flow.
Thanks.
Bob
Depending on the age of the property and its condition, 5-10% of gross rents is typical.
look at teh previos owners schedule E and see what he spent the last several years.
A lot depends on "deferred maintenance" I have hear many people say that in a decent neighborhood single family residences 50-75$ a month is adequate. If the roof etc. has been deferred then that is a whole other game.