WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by Cognac


#1

Posted by Laure on November 01, 1998 at 21:42:59:

I’d say, from my experience, that figure should be right. Go with it. I figure 600/year for my single family homes.

Laure :slight_smile:


#2

WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by Cognac

Posted by Cognac on November 01, 1998 at 19:11:06:

Hi,

I can’t remember… on a multi-family property’s Income & Expenses statment, what is the expected percentage (rule of thumb) for the category “Maintenance and Repairs”? I’m particularly interested in knowing what a bank is looking for since I am preparing this projected Operating Statement for Bank Finance.

Thanks!

Cognac


#3

25-40% - Posted by John Behle

Posted by John Behle on November 02, 1998 at 17:04:22:

On a standard APOD (Annual Property Operating Data) form used in the industry on multiple units, the average expenses run 25-40% depending on the age and condition of the building. In the CCIM courses they go into weeks of analysis on how to properly estimate income and expenses on a building. The more units there are, the more these statistics hold true. If you have a seller claiming less than 25% expenses, he’s leaving things out. Make sure all management expenses and salaries are included.

Single family home information is ir-relevant. It’s apples and oranges. They cannot be adequately compared in income, expenses or values.


#4

Re: WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by PBoone

Posted by PBoone on November 02, 1998 at 03:14:34:

Last year we spent 3000 on our 10 unit that would be 300 per unit.
Pat


#5

Re: WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by Kathy

Posted by Kathy on November 01, 1998 at 19:37:04:

Carlton Sheets says $40-50/mo. per unit per month.


#6

Re: WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by Cognac

Posted by Cognac on November 02, 1998 at 08:10:43:

Yeap…

This seems to be a much more realistic figure to me. Maybe the fact that it is a large multi-family makes a difference?

Thanks for the responses!


#7

Re: WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by Cognac

Posted by Cognac on November 01, 1998 at 19:52:17:

Kathy,

Thanks for the reply but somehow I just don’t feel completely confident when using Carlton Sheets as a good and reliable resourse for my real estate financing. I wonder how realistic that ~$50/unit is ?

Cognac


#8

Re: WHAT IS RULE OF THUMB FOR BUIDING EXPENSES?? - Posted by ebreeze

Posted by ebreeze on November 02, 1998 at 16:04:50:

How, other than comps, to determine selling price for rental homes. What should be included?


#9

RE: Works for me!! - Posted by Kathy

Posted by Kathy on November 01, 1998 at 20:10:19:

Don’t have a clue!! I feel confident using it based on my limited real-life experience. We own a house and duplex on one parcel. For the 11 years we have owned it we’ve barely done maintenance except for replace a furnace in the house and one duplex unit for about $1800 each. We also sided both buildings and roofed the house, but we knew that would eventually have to be done when we bought it. I would put that under rehab. expenses when purchasing, not consider it maintenance.