Operating expenses
CapEx (Capital Expenditures)
Reserves for large infrequent repairs — roof, HVAC, water heater. Typically 5–10% of rent set aside each month.
Why CapEx (Capital Expenditures) matters
Capex differs from maintenance — these are the BIG fixes (roof = $10-20k, HVAC = $5-10k). Even at 5% of rent, you're only saving $100/mo on a $2k rental, which doesn't cover a roof replacement in 10 years. Adjust upward for older buildings.
How to check CapEx (Capital Expenditures) before you rely on it
Walk the property with the inspection report and write down the replacement cost and expected timing of the roof, the heating and cooling system, the water heater, the electrical panel, the plumbing, and the windows. Price the items due within five years from contractor quotes and spread them across the months until they are due. Compare that monthly figure to a flat percentage of rent; on an older building the quoted figure is usually higher, and that is the number to use.
Related terms
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Where CapEx (Capital Expenditures) shows up in TrueCap
Operating expenses are line items in the analyzer's expense section, each labeled with its source — a HUD or FRED benchmark, a TrueCap default you can replace, or your own number. Property tax is always your local figure. Together they produce NOI and cash flow after reserves, and the results view shows how much each one moves the decision.