CapEx Reserve Percentage

A planning metric for roofs, HVAC, flooring, and other capital items—not the same as OpEx.

CapEx reserve % = reserves ÷ effective gross income × 100.

Tip: Keep “Annual CapEx Reserves” and “Effective Gross Income (EGI)” on the same basis (period, units, and population) before calculating CapEx Reserve Percentage.

Cluster: Real Estate hub · Cap rate · Percentage guide

CapEx reserve percentage shows planned capital reserves as a share of effective income.

Enter annual CapEx reserve budget and EGI.

$
Planned annual capital reserves
$
Annual EGI

CapEx Reserve %

Understanding CapEx Reserve Percentage

How we calculate. CapEx reserve % = reserves ÷ effective gross income × 100. The form uses the same arithmetic as the worked examples on this page. See our methodology and accuracy policy.

Real-world scenario: A typical CapEx Reserve Percentage case uses annual capex reserves 6000 and effective gross income (egi) 100000. Enter the same figures below to reproduce the worked path.

What is CapEx Reserve Percentage?

A planning metric for roofs, HVAC, flooring, and other capital items—not the same as OpEx.

  • Reserves ≠ OpEx
  • Use EGI or NOI consistently—this form uses EGI
  • Age/condition drive needs

The Formula

CapEx Reserve Percentage
Reserve % = (Annual CapEx reserves ÷ EGI) × 100

Worked Example

Scenario: CapEx reserves $6,000; EGI $100,000.
Step 1: 6000 ÷ 100000 = 0.06
Step 2: × 100 = 6%
Answer: CapEx reserve percentage is 6%.

Common Use Cases

  • Underwriting: reserve assumptions
  • Owner budgets: capital planning
  • Lender stress: CapEx haircuts

Pro Tips

  • Inspect deferred maintenance
  • Don’t double-count in OpEx
  • Update after major projects

Limitations: CapEx Reserve Percentage results are educational real-estate planning aids—not appraisals, loan offers, or investment advice. Confirm figures with qualified professionals.

FAQ

Is CapEx in NOI?

Usually CapEx is below NOI. Some analyses use adjusted NOI—document your approach.

What if EGI is 0?

Reserve % is undefined—enter positive EGI.

Authoritative References

For real estate investing concepts, consult: