Key takeaways
- Capex is not optional — it's deferred guaranteed.
- Reserve 5% of gross rent annually for capex.
- Roof, HVAC, plumbing, and turn costs are the big four.
- A capex schedule extends asset life and resale price.
- Vendors should be vetted before urgency arrives.
Core concepts
Capex categories
Roof (20–25y), HVAC (12–15y), plumbing/electrical (30y+), turn costs (every tenancy).
Sinking fund
Dedicated reserve account funded monthly so capex never hits cash flow.
Preventive maintenance
Annual HVAC service, gutter clean, pest control prevents 60% of emergency calls.
Vendor stack
Plumber, electrician, HVAC, handyman, painter, landscaper — vetted, on file.
Step-by-step framework
- 1Inventory remaining life of roof, HVAC, water heater per property.
- 2Fund a sinking fund at 5% of gross rent.
- 3Schedule preventive maintenance annually.
- 4Maintain vendor list with after-hours contacts.
- 5Review capex plan every 3 years.
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Common mistakes to avoid
- Treating capex reserve as 'extra cash flow.'
- Skipping preventive HVAC service.
- Calling random vendors during emergencies.
- Deferring small repairs into large ones.
Frequently asked questions
Roof life expectancy?
20–25 years asphalt, 40–50 metal, 30–40 tile.
How much to reserve per unit?
$1,500–$2,500/year per SFR; less per door for multi.
Are home warranties worth it?
Rarely — high deductibles and slow service.
Vendor markup vs in-house?
External vendors save vs hiring; in-house only past 50+ units.
Action checklist
- ☐Remaining-life inventory per property.
- ☐Sinking fund at 5% gross rent.
- ☐Annual preventive maintenance scheduled.
- ☐Vendor list with backups.
- ☐3-year capex plan documented.
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