I mean do you budget for that when evaluating NOI/cap rate? If so what area of expenses do you apply the possible 1-4k cost to fix a previously owned home they walked from?
For example, under:
Do you factor abandoned home repairs under a general park maintenance?
As always, thanks for your replies!
yes i do but i dont think its the best way to do it. I am asking my accountant in jan.
Buying a community is often very competitive so people often offer more than makes sense just to get the community.
But, yes, I would try to enter those numbers into my calculations and my negotiations. I would certainly want and need them to set up my pro forma if I was successful in buying the community.
Do you pretty much calculate them under repairs/maintenance? My issue is lacking experience predicting what they are. I guess we all start there.
Actually the tax man would consider putting that home in the photo in shape to be a capital expenditure. But if it just needed a little fix’n here and there, it could be rightly be added to the repair line on the P&L.
Where exactly where is the line drawn between capital expenditure and repairs & maintenance? It isn’t, exactly a line but gray zone.
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