How Much CapEx Should You Reserve for Your Next Property?

I have a proposition for you. You give me $20,000 and I’ll give you… nothing. In fact, you’ll give me another $50 to $200 per month until you go crazy or broke.

Sound like a good trade? No? Unfortunately, many rental property investors make this same trade with every purchase—because they didn’t properly calculate rental property expenses. The end result? Negative cash flow. Losing money. And unfortunately, it happens all the time in real estate investing, and it leads to financial ruin.

I should know—90 percent of the deals I have purchased have been from “failed landlords.”

But why do so many landlords fail? Simple. They don’t do do the math. They buy properties based on emotion, gut feelings, or bad calculations and then wonder why they lose money. And there’s one calculation that trips most people up: estimating the costs required to own rental properties.

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