Why Have Reserves? How much do you keep on hand?
I have seen multiple threads and discussions on BP surrounding the questions of reserves. SO, I won't ask the same question again but pose it from a different angle. If all of the following happened to you, do you feel comfortable with your current level of reserves.
Here is what has happened in the past 60 days:
-Sewage backup in a quad. The result was needing a clean out installed which required the front yard to be dug up and the lines then hydrojetted.
-two different quads had upstairs bathrooms have plumbing issues that caused water to leak through the floor into the units below.
-two property fires - One of the fires was in a quad and was thankfully contained to the one unit. I have great coverage that included rental income loss, but I still had to come up with the unit in a quad. The second fire was in a condo, while the fire was fairly small, it set off the sprinkler system and two sprinkler heads doused the entire unit. The HOA master policy was recently changed and the deductible was increased from $5k to $25k. This left me with a gap in coverage in my personal policy. The tenants also cancelled their renter's insurance. I am now fronting the repair costs while my attorney works with the insurance companies, HOA, and pursues legal action against the tenants for damages.
-two tenants each gave their 30 day notice, they were each tenants that I inherited when I bought the buildings they are in. The units have not been updated in 20 plus years so each will need a full turn (paint, flooring, etc..)
Then lastly, while this isn't a maintenance issue, it has caused a drain in my cash on hand. I just purchased a new quad and the loan I got included funds for renovations, but the construction draw is paid out after work is done and verified by an inspection and invoices. I not only had put up money for the down payment but have been cover the renovation costs in between draw periods.
This summer has been the perfect storm of maintenance issues and has tested not only my level of reserves but my resolve of how bad I want to be a real estate investor. Every property I own has had a $1,000 plus issue come up on it.
With all of this in mind, do you feel you and the level of reserves you have are enough for a perfect storm of maintenance issues?