I was wondering if there are modifications to 2% rule with new construction? There is a situation where I’m buying a property and getting a couple lots thrown in. If I were to put up some new housing would I still be using the 2% since repairs/deferred maint…is going to be minimal for the first years?
Thanks
Maintenance does not depend on the age of the building. In my experience, most maintenance is caused by the tenants, so having a new building won’t help much. Of course, you should not have many capital expenses right away, but you’ll still need to have a capital expense allowance for the future.
Good Luck,
Mike