Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
How much in reserves do you keep per property and what sources do you use for this? I am a big fan in keeping proper reserves for each property I own (or plan to own) for two reasons: No. 1 - the bank would require it and No. 2 - because unexpected things can happen in bunches and at the worst time. I like to keep 6 months of PITI for each rental that I own (whether have a mortgage, owner finance or commercial) and I have found that THIS...not actual cash for down payments and repairs is what will slow my growth a little unless I increase the velocity of my reserve capital. I use a combo of cash, stock and 401k to continue to increase this number. Curious what everyone else uses.
Syracuse, NY · Member since 2015 · 32 posts · 33 votes
8y
Looks like you were right, glad to see you're yet another great part of this community. I guess what brings people together is controversy, like what's going on with Erent Payment. Also, the topic of reserves isn't as sexy as topics like "increase your rental income quick" or "my tenants just shot somebody".
Generally my reserves formula is three months the rent, but I have a lot more because of my system. In the middle of each month, my bank (Chase) automatically takes out 10% of my earnings and sends it into my account with a credit union that I never use because it's too far from me. So whatever I have in my Chase account is what I have to work with each month.