Your STR Proforma's 5% Repair Line Is a Guess

Bookings were already coming in. The house looked like the photos. And the proforma had a repair line, a sensible one, the kind you include so nobody can say you forgot.

Then the water heater went. Then the AC duct insulation. Then a tree.

None of it was in the sheet. All of it hit the P&L. And the feeling is the same every time: we ran the numbers carefully, and still didn't see it coming.

Some surprises never stop being surprises

That part doesn't go away with experience. A pool can hide a plumbing problem until its first real season. An AC unit can pass inspection and still be closer to retirement than the listing let on. You can own houses for years and still get a bill that wasn't in the model.

Projecting "the unexpected" isn't a skill you eventually master. Some of it stays unexpected.

What experience does change is what you're willing to trust before you buy.

A 5% repair line may be a reasonable placeholder, but it isn't a property-specific forecast

A flat percentage treats every house the same. It doesn't account for a water heater near the end of its life, an AC unit older than the listing suggests, or a pool that hasn't been through a full season.

Some of that you can see coming. I now ask for the age of the major equipment before I treat a repair line as real. A water heater with a known age has a known horizon.

Some of it you can't. Nobody can tell you when a tree will come down or when a storm will leave you with a leaking roof.

And look at where most proformas come from:

• A proforma from the realtor is built to show the property's potential. That's its job. It isn't built to find what's about to fail.
• A proforma built by someone who's never looked at the equipment or asked what fails in that climate is only as good as the round numbers they were given.

I've used those sheets. They're fine for a first look. They're a bad place to stop.

What I underwrite now

My approach now is simple: I don't take the repair percentage at face value.

I look more closely at the property itself: its major equipment, how old that equipment is, its maintenance history (if available), and the realities of the climate it operates in.

A Gulf Coast beach house doesn't have the same risk profile as a ski-town chalet. A septic system with its permit and construction details on file isn't the same underwriting question as one nobody can tell you much about.

You don't need to predict every repair. You do need to know when the generic number on the spreadsheet is hiding a risk you should be asking about.

That's the difference between putting a repair line in a proforma and actually underwriting the property.

Before you sign

If the proforma on the house in front of you still says "repairs, 5%," treat it as a starting point, not the answer.

The question isn't whether you'll have repairs. You will.

The question is whether the number in your proforma reflects the property you're actually buying, or simply a convenient assumption.

That's what an STR Purchase Validation is for: a closer look at the risks a proforma may have missed, before they become your bill.