Posted by Larry Harbolt on May 23, 2003 at 19:54:29:
Donovan,
After years of renting property I have determined that 40% of the gross monthly rental income is the right number for me. I break the 40% down as follows, Property Taxes and Insurance 25%, maintenance 10%, and vacancy 5% of the monthly gross rental income.
As far a maintenance goes, you don’t have any problems today but when you need to replace a roof, replace a stove or refrigerator, a furnace or air conditioner you will be glad you set that money aside.
Larry
How much do I figure for maintenance on duplex? - Posted by Donovan (TX)
Posted by Donovan (TX) on May 23, 2003 at 19:36:05:
Up until now, I’ve invested in mobile homes as rental properties. I am now looking to purchase a duplex (I plan to live in one side and rent the other for the next three years until we build a house in 2007). I found a great duplex that is only 2 years old in a secluded neighborhood. Each unit is a 3 bed/1.5 bath and it’s at the end of a cul de sac (no traffic) in an area that will soon develop new subdivisions (good appreciation potential). It’s basically the best looking and biggest duplex in the area. I’m looking at the numbers (PITI) but I need to know how much I should figure in for monthly maintenance. Being only two years old, I don’t anticipate much maintenance for awhile, but you never know since I’ll be a first time home buyer.
Anyway, here’s the numbers I have, if someone can help me out with figuring monthly maintenance and any other expenses I’m forgetting.
Sale Price: $160,000
Down Payment: $8,000 (5%: first time home buyer’s incentive)
Loan: 30 years @ 6.0%
Monthly PITI: $1277.55
Each side currently rents for $800.00 While I’m living in one side my cash flow will be negative (-477.55)which I’m okay with since this is what I pay approximately now for my current residence. When I move out and rent both sides I will have a positive cashflow of $322.45. How much should I take out for maintenance and/or other expenses I’ve forgot? Any help would be appreciated…