Author Topic: How much to set aside for repairs and replacements?  (Read 1550 times)

MarciaB

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How much to set aside for repairs and replacements?
« on: April 08, 2014, 03:49:40 PM »
Sorry if this has been covered.

On my rental, should I be setting aside a certain percentage of rents towards repair/replacement? And if so, what percentage is ball park?

Or should I just figure out the most expensive thing (roof?) and save up enough to cover that, knowing that I could cover anything else short of that??

Thanks for any of your good thoughts on this.

arebelspy

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Re: How much to set aside for repairs and replacements?
« Reply #1 on: April 08, 2014, 04:28:48 PM »
Figure out how long the various components have until replacement, the cost of replacing, and divide the cost by the time to get how much you should save per month/year.

EDIT: Here's a link that may help: http://www.biggerpockets.com/renewsblog/2011/10/25/how-to-determine-your-multifamily-capital-expense-budgets-and-recurring-replacement-reserves/
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MarciaB

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Re: How much to set aside for repairs and replacements?
« Reply #2 on: April 08, 2014, 05:05:31 PM »
Resourceful and wonderful as usual. Thanks ARS!

arebelspy

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Re: How much to set aside for repairs and replacements?
« Reply #3 on: April 08, 2014, 05:25:07 PM »
No problem!  Feel free to post any follow up questions that doesn't answer or if anything is still unclear.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.