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Old 05-08-2013, 06:34 PM
 
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1.5% of the home value for tax and insurance. =202.50

$100 per month HOA =$100

Reserves of 30% of rent. = $320.40

Property Management 8% of rent. = $85.44

Total..................................$708.34
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Old 05-08-2013, 08:42 PM
 
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Quote:
Originally Posted by lvoc View Post
1.5% of the home value for tax and insurance. =202.50

$100 per month HOA =$100

Reserves of 30% of rent. = $320.40

Property Management 8% of rent. = $85.44

Total..................................$708.34
Thanks. Your reserves seem quite conservative to me and generally aren't included in a cap rate calculation anyways, but I guess I can see that scenario in some bad outcomes.
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Old 05-08-2013, 10:51 PM
 
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Originally Posted by gaash2 View Post
Thanks. Your reserves seem quite conservative to me and generally aren't included in a cap rate calculation anyways, but I guess I can see that scenario in some bad outcomes.
My reserve is mildly optimistic. Hard core rental guys would tell you 45%. For a newer plaqce you might go down to 25% but below that is folly.

Anyone who does not include a reserve in such a calculation is suicidal.

YOu ignore the cost of money but you need the operating expense correct.
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Old 05-09-2013, 08:36 AM
 
133 posts, read 146,928 times
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Quote:
Originally Posted by lvoc View Post
My reserve is mildly optimistic. Hard core rental guys would tell you 45%. For a newer plaqce you might go down to 25% but below that is folly.

Anyone who does not include a reserve in such a calculation is suicidal.

YOu ignore the cost of money but you need the operating expense correct.
Eh. I guess if you rent in the ghetto and older buildings. I know plenty of people who rent newer stuff with nowhere near 25% cap-ex expenditures, not in vegas, but in florida and ny/nj. Also, you can use cap-ex expenses to boost your cost basis, and one can argue increases the value of the property as well, so you get some of that money back down the road when you sell.
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