I am thinking of setting aside 10k in cash reserves for my first investment property after all of the closing costs and possible repairs needed to get the property rent ready. Is this too much or too little? Thanks for the help. I am also putting 25% down payment on the property.
Look into house hacking... you don’t have to put much down depending on where you live (3.5% of the purchase price) instead of the 25% down payment you thinking about.
Also having a lot of money for reserves is a great idea
@James Nix I am looking to house hack on my next military duty station but I am currently just trying to get my first deal under my belt. Thank you for the info.
@Dimitri I think $10k is a good number for reserves on your first property. Enough to cover most issues, and better safe than sorry!
@Dimitri Paspalaris How expensive is the property and where is it? If it's a big/expensive house in a more expensive area of the US, $10k may be a good place to start, but I'd definitely start setting aside money from the monthly income for other maintenance and cap ex items. If it's a big house, it may cost $10k just to replace a roof. I start saving at least 5% of the gross income for maintenance and another 5% for cap ex savings. Congrats on the rental property.
Hi @Dimitri Paspalaris , I'm interested to hear what you did and how things are going. I'm working on my own plan for cash reserves and looking for input. On one hand, I'd like to be prepared for anything comes my way. On the other hand, I don't want to spend the next four years saving and prepping for a 'worst-case scenario' which may never happen.
Was $10K as initial reserves enough? What curveballs and unexpected events happened and how did you deal with them?