How much to keep in reserves for first property?
Hi All,
I close on my first investment property in three weeks, and I'm wondering if it's common to inject a certain amount of reserves in the property's bank account right off the bat. Purchase price is $122,000 and rent will be $1450, and I was anticipating keeping 6 months of PITI as a starter cushion, and then build on that as rent checks start coming in.
For all future properties, I'd like to consider 6 months of PITI as being part of my initial investment/cash needed at closing. Please let me know what your common practice is! In the same vein, is there a point where you stop building a property's reserves and start allocating those monthly funds elsewhere?