What is a reasonable Repair and maintenance %

[MKBridge]

Hi:

We have had an offer accepted on a buy and hold house in Vernon. It has a suite in great shape on the main floor, ready to put tenants in. The downstairs also has a suite which we will be renovating (updating) prior to the renting out.
I want to be accurate in my ROI calculations as I have JV partners who will be putting in the closing costs and down payment.
What do I factor in as an expected % of rent for repairs and maintenance?
Also, does anyone have data on what the current appreciation rate is for BC?
Could you please pass that source on to me if you have the answer.

Thanks in advance, Kathi

 

[Rickson9]

I allocate 8-10% of gross. Unfortunately I don`t have a source to cite for that.

 

[fumbrunner]

I use 20% of gross, which also includes insurance and management fees.

 

[Thomas Beyer]

5-20% of rent .. depending on condition.

Some months, many months even .. nothing .. bamm .. then a new roof, new hot water tank and new carpets for $23,000 total ..

have a large reserve (depending on age of asset) .. hard to budget precisely !

 

[Nir]

QUOTE (ThomasBeyer @ Dec 23 2009, 09:42 AM) have a large reserve

Hi Thomas,

Technical question - by reserve fund do you mean having a minimum balance of say $25,000 in the JV joint bank account (I guess with ~zero interest)?
OR can the money be kept elsewhere/do you keep it elsewhere?

Also, if for example one of the partners has LOC not currently used (meaning money is available) can this be used as/called "reserve fund" although there isn`t really a positive balance in any account?

THANKS.

 

[invst4profit]

Kathi do you already have estimates for all other monthly expenses.
Vacancies, legal, utilities (when vacant), advertising, accounting, taxes, insurance, etc?

 

[MKBridge]

QUOTE (invst4profit @ Dec 23 2009, 09:11 AM) Kathi do you already have estimates for all other monthly expenses.
Vacancies, legal, utilities (when vacant), advertising, accounting, taxes, insurance, etc?


HI:

Yes I have included all these other expenses on my spreadsheet.
Kathi