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
Worked Example
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:
- National Association of Realtors — market context
- Investopedia — NOI — net operating income basics
- CFPB — homebuying education