How much cash reserves do I need for my rental property?
As I have mentioned many times before in previous blog posts, having a reserve set aside for future repairs is a must. It is not a matter of if things will break and need fixing it is a matter of when. Also, maintenance and repair items tend to be one of the bigger expense line items for a rental property. It is very much part of the cost of doing business. Unfortunately, many landlords are caught off guard or by surprise when things begin to go wrong and the tenants begin calling in with their repair requests. As we have talked about in the past, there are some maintenance items that you legally MUST deal with.
One of the problems we see as a professional property management company is that too many owners see the cash flow at the end of the month as money that is completely free and clear. Take the illustration of investing in stocks – particularly