A maintenance reserve is the planned operating budget allocation for routine and preventive maintenance. Distinct from capital reserves (major replacements). Typical LA multifamily: $400–$800 per unit per year.
Maintenance reserves cover routine repairs, preventive maintenance (HVAC service, annual inspections), common-area upkeep, and normal wear-and-tear. Calculated per unit per year; varies by building age, climate exposure, and amenity level.
LA multifamily operating statements should include maintenance reserves as a normal operating line. Sellers who exclude them overstate NOI. Buyer underwriting typically adds maintenance reserves to the seller's stated numbers if they're missing or understated.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →