For example, the property may need to be rezoned or you may need to hire a new property manager.
Cost contingencies are essentially rainy day funds that are set aside to cover unexpected acquisition expenses. This portion of your budget can be used to cover lost cash flow due to early vacancies, renovations, and other upfront costs. For example, the property may need to be rezoned or you may need to hire a new property manager. These costs can often be incurred before you have stable cash flow.