CapEx Reserve Calculator

How to use this calculator

Enter your monthly rent, then the replacement cost and expected life of each major component. The calculator divides each cost over its life, adds them up, and returns the monthly and annual reserve you should bank — plus how it compares to the 5–10%-of-rent rule of thumb.

What the metrics mean

• CapEx reserve — monthly savings for future major replacements.
• Useful life — how many years a component lasts before it must be replaced.
• Monthly accrual — a component’s replacement cost divided by its life in months.
• % of rent — total reserve as a share of monthly rent — a quick sanity check against the 5–10% rule.

Frequently asked questions

What is a CapEx reserve?

A capital expenditure reserve is money set aside each month for major component replacements — roof, HVAC, water heater, appliances, flooring — so a big-ticket failure does not wipe out your cash flow.

How do you calculate a CapEx reserve?

For each component, divide its replacement cost by its useful life in months. Add the monthly accruals together and you have the reserve to bank every month. This calculator does it across the five biggest items.

How much should I budget for CapEx?

A common rule of thumb is 5–10% of gross rent. The component-based method here is more precise, but the percentage is a good sanity check — the calculator shows your reserve as a percent of rent.

Is CapEx the same as maintenance?

No. Maintenance is routine repairs (a leaky faucet, a service call). CapEx is the periodic replacement of major systems and components. Both belong in your budget, separately.

Want reserves built into every underwrite? dre1mery.com budgets CapEx on every property so your cash-flow numbers are honest.