What % of rent should a landlord set aside for repairs?

[Ohioguy]

We finally got our old place rented out, after trying for about 3 and
a half months. Even after paying 10% to the property management
company, we will be getting the equivalent of 10.5% return on our
investment every year, after taxes.

Trouble is, I'm not sure how much of this to set aside for repairs.
The place is about 93 years old, but while we lived there for the past 6
years, we upgraded and repaired the vast majority of issues. It has
furnaces just 2 years old. Wiring is 85% updated. Supply plumbing is
100% new. Roof was new end of 2003. Given the age of the structure, I
would normally have increased whatever the standard deduction is.
However, now we have already replaced the majority of things that would
likely cause a huge expense, at least for the next 10 years or so.

Anyone know, is there a standard amount to set aside for repairs on a
property?

Thanks!

[Lou]

"Ohioguy" <no...@none.net> wrote in message
news:gTZqo.6959$%I7....@newsfe21.iad...

How long are you going to keep the place? For instance, you put a new roof
on it about 7 years ago. Most asphalt shingles are good for about 20 years,
give or take, though some are supposedly good for 30. Assuming you have the
20 year variety, you have about 13 years to set aside enough money to
install a new roof when the time comes. Lord only knows how much money that
will be with 13 more years of inflation, but it's unlikely to be less than
you paid last time.

Furnaces seem to last about 20 years. Water heaters less. You lived there
for several years, how often did the place have to be repainted, and at what
cost? When a tenant moves out and a new one in, you're likely going to have
to clean and repaint the interior - what's your estimate for that cost, and
how often is it likely to arise?

I don't think it's a matter of some percentage of the rent or your profits.
You estimate your costs as realistically as you can, add in a fudge factor,
and set aside the money to cope with those costs as they arise. Or, you
don't set the money aside and when the cost comes up, you borrow the money
and pay it back over time.

[Bill]

$5,000.00 should cover just about anything. Or that much available on
a credit card.

And if the house is paid for, then you could always get a loan quite
easily. Might talk to the bank about getting a loan quickly for this.
Maybe set up a line of credit in advance.

A major expense is a tenant who damages the property. Many years ago
the average cost for landlords each time someone moved out was around
$800. I don't know what it is now...