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Rent Ready Capex Calculator
Capex — paint, flooring, appliances, HVAC — is separate from repairs and shouldn't come from operating budget. Best practice: amortize each component's replacement cost over its lifespan and reserve that amount monthly. This calculator sizes the reserve properly.
Monthly capex reserve
$225
Annual capex reserve
$2,698
Roof reserve /mo
$40
HVAC reserve /mo
$44
Water heater reserve /mo
$15
Appliance reserve /mo
$31
Flooring reserve /mo
$54
Paint reserve /mo
$40
How the math works
Roof $40/mo, HVAC $44, water heater $15, appliances $31, flooring $54, paint $40 = $224/mo total capex reserve. This reserves ~$2,700/yr toward eventual replacements. Deduct from NOI for honest cash flow analysis.
Fund the reserve in a separate account. Many operators skip this entirely because monthly cash flow looks better — then get shocked by a $12K roof or $8K HVAC. Reserve monthly; it's cheaper than borrowing when the time comes.
How to Use
- Enter replacement cost and expected lifespan for each capex category.
- See monthly reserve per category and total capital reserve per unit.
Frequently Asked Questions
Why amortize instead of saving for actual timing?
Smooths cash flow — you don't get a $10K surprise in year 10. Also makes NOI more honest (real economic depreciation vs cash timing). Lenders increasingly demand capex reserve in their underwriting.
What's a typical monthly capex reserve?
Class A single-family: $150-$250/unit/mo. Class B: $200-$350. Class C: $250-$450. Older buildings or heavy systems (boilers, elevators) can push $500+/mo.
Capex vs repairs?
Capex: replaces or upgrades (new roof, new HVAC, new kitchen). Repairs: fixes/preserves (patch drywall, replace faucet, unclog drain). IRS BRA test (Betterment/Restoration/Adaptation) is the standard for capitalization.
Do I really need the reserve if systems are newer?
Yes, just sized smaller. A 5-year-old HVAC still loses 5% of life every year — your reserve should reflect the replacement liability accumulating. Skipping capex reserve entirely is a common mistake that surprises operators at year 10-15.
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