What is a reasonable maintain expense for 80 units apt building - build in 1968 - not incl capital improvement

Please review and advise- Thanks
In Property Management - Asked by Derek B. - Jan 14, 2011
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Answer(s)

Steve M.
Owner/Investor
Plano, TX

Derek,
It depends on how much and what components you change out in your capital improvement program as well as many other factors. Other factors include geographic location, mechanical configuration of the HVAC and hot water, type of roofing, type of electrical wiring, work that has been done previously, etc, etc
If all your plumbing fixtures and fans and appliances are new your maintenance costs will be significantly less than if you replace nothing and run it just as you found it.
The National Apartment Association (NAA) puts out a study every year that you can buy. It is the "Survey of Operating Income and Expenses in Rental Apartment Communities". They track by product type/age/geography/etc. That is ball park numbers you might be able to rely on for a 10,000 foot view.

Jan 17, 2011
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Tyler J.
Broker/Agent
Portland, OR

Derek,
I would estimate approximately $600 per unit/per year for maintenance and repair and another $150 per unit/per year for turnover expenses. This is really just a rule of thumb, a lot will depend on the condition of the property as you can imagine. If the property is located in an area plagued with high turnover, you should raise your turnover expense accordingly.

Jan 17, 2011
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Jack S.
Owner/Investor
Cheyenne, WY

I would budget 1% to 5% of what the rent is for repairs per unit, in my leases I charge for carpet cleaning which comes out of the deposit never had many complaints about it, plus it is a expense tenants should have to pay for, I also gave them the choice to pay for a professional cleaning rather than me and if they did I refund all of their deposit

Jan 23, 2011
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Robert P.
Broker/Agent
Lake Oswego, OR

I'm the co-founder of a company that does property tax appeals. I function as an expert witness at trials. The reason I offer this background is that in preperation to testify I have recently looked at 3 years of data on 70 complexes...most built in the 60's through 80's. In most cases assets in the range you are talking about expenses average 45-52% of Effective Gross Income. To clarify I'm referring to operational expenses being a percentage of operational income.
If I have a parking lot re-stripped I call that operational expense. If I put in a new parking lot that is extraordinary expense, and I exclude that amount from the calcs. In a similar way if I cut down 30 trees on excess land and sell those to a mill I count that revenue as extraordinary and exclude it from the calcs.
For multifamily information: I'm the author of "The multifamily insider report" available at: www.rosecitycre.com
For information on property tax appeals for US real and personal property: www.primeptn.com

Aug 4, 2011
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