Reserve / escrow account tracking for capex, opex, vacancy, etc

I’m not sure if this could help others, but I’ve found it useful to save a percentage of income for future cap x and operating expenses on a monthly basis. However, I’m not finding a good category to match this up with. I’ve used “general escrow payments” as a place holder. I would be curious if this would be helpful to anyonelse?

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I agree a way to predict future CapEx would be great. If we had a way to enter the age of the roof, water heater, appliance, etc. that would allow us to predict future expense based on average useful life of any particular thing.

For example, I buy a home that has a water heater that is 4 years old, and I know the useful life of that water heater is 10 years, then I can predict in 6 years I may have an expense for a new water heater. It will also allow for property owners to make better decisions when something breaks…fix or replace.

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@chad229 @gaylordfoxriverprope I think what you’re looking for here is a reserve account, which is essentially an escrow that you control (versus the more traditional escrow account controlled by a lender or other third-party). You can certainly continue tracking this in Stessa under “Transfers > General Escrow Payments” if you like.

The important detail here is that these are not actual expenses. By using the “Transfers” bucket they will (correctly) not show up on your Income Statement or Net Cash Flow reports. Do keep in mind that net escrow account activity does show up on your Balance Sheet report, so using this method to track internal reserves does run the risk of overstating your actual assets if you’re not actually moving money into a separate account.

If other investors would like to track internal reserves for capex, vacancy, or any other risk factor, please vote for the original post and add your specific thoughts via a “Reply” below.

The work around by using the “transfers” bucket is a creative idea. I really looking for more of an accounting of the age of CapEx items like the the water heater, roof, etc. It could be done manually in the property notes section with in the property details tab. I was just looking for more of a template that could be filled in, then automatically track the age based on an imputed date (install date).

A report could then be run to see how much CapEx expense would be coming up in future years at specific times.

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I agree, a Transfers> Maint, Repair, CapEx category would be great

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Yes, this would be a great addition. Hard to see our balances unless we use similar buckets directly at the bank which holds the property account.

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More options for the investor the better. I love this idea, as it can help us project out into the future the data we are already collecting here.

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I like both ideas that keep track an “internal reserve” for Maint, Repair, CapEx category as well as a future projection expense.

My follow-up question is: How should I mark the transaction when a repair is needed to deduct the amount from the internal reserve “Transfer” bucket? How about if the reserve doesn’t have enough money and I need to pay the rest from my pocket?

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This is a pretty important feature for me. I’d like to have an easy way to know how much cash I have contributed for CapEx (and, separately, Repairs and Maintenance) reserves per property across my portfolio without needing to open a number of bank accounts or track things outside of Stessa. Strong upvote on this from me, considering otherwise this platform has been EXACTLY what I’ve needed for my growing portfolio!

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More narrow transaction classifications for escrow (debt service reserve, capex reserve, lease rollover reserve, etc.) are great. But this ultimately requires to maintain dedicated reserve accounts. I think there should be a way to implicitly track/budget these without actually having a transaction corresponding to funding the reserve