Maintenance & Repairs Reserve

Reserve for routine repairs and upkeep — default 12% of EGI.

Definition

Water heaters fail. HVAC needs servicing. Faucets leak. This reserve covers the ongoing cost of keeping a property habitable. Older properties and properties with deferred maintenance need higher reserves.

Formula

Maintenance = EGI × maintenance_reserve_pct (default 12%)

How Kaison Uses This

Configurable via operating_expenses.maintenance_reserve_pct.

Example

$1,518 EGI × 12% = $182/mo

Pro Tip

Post-rehab properties can justify 8-10% for the first few years. Bump to 12-15% after year 5.

Related Terms

Effective Gross Income (EGI)

Gross rent minus vacancy — the realistic income baseline.

Capital Expenditure (CapEx) Reserve

Reserve for major replacements (roof, HVAC, appliances) — default 8% of EGI.

Total Operating Expenses

All recurring costs: management + maintenance + capex + insurance + tax.

Educational content only. Consult a CPA or attorney for advice specific to your situation.