I think it's a good idea to save for all of these things. But does this money just sit in a bank account waiting for disaster to strike? lol. Or do you eventually save a specific about of money depending on the house and just replenish that amount when something needs to be repaired?
@Justine Scheuher To be safe, yes it just sits there. Consider it part of the "package," the investment property and the funds on hand. For large apartment buildings, banks would definitely require you to have these funds.
In reality, what is important is liquidity of these funds. For instance, I flip as well as buy and hold. I have no problem draining my reserves for a flip as I know I could borrow on credit card short term if I needed cash and will be out of the flip in a few months.
But starting out, just set aside a reserve in a bank account.