Get Reserves? Or Buy another property?

Question

Hey all,Would love to hear your take on this one.In my current situation, I have the money for a down payment and I can get financing and buy another property(this one will be number 3).Now, if I buy another property, I will have almost nothing in reserves, meaning that in a time of a horrible situation or whatever, I will not have a cushion to rely on.  So, the question is this, should I wait till I have some kind of reserve if so-How much do you think that will be? (I know it's kind of a general question but try and give examples of your own experience, it will help me modify it to my situation). Or, Should I buy the third property now? ThanksYaron.

Account Closed · Answer

Having reserves will help you sleep at night.

Yaron H. · Answer

Account Closed Thanks for the reply.Some details to add to the equation. I'm 24, living in my parents' house, don't have wife and kids yet, will start university next year- a close to home so I'll keep living with my parents, no student loan needed (in our state it's not expensive as in the USA)- would you change your opinion with that information or still sticking to reserves?

Account Closed · Answer

@Yaron Horsky Hmm. Unless this new property was the perfect investment that you couldn't pass up. I would not spread myself so thin so as to not have any cushion for murphic events - life inevitably throws you a curve ball and having reserves is a great plan. Living at home and starting school sounds like you will be okay either way. I definitely prefer safety nets though!

Account Closed · Answer

@Yaron Horsky  I would choose reserves. Reserves provide you with stability and protection. The last thing you want is something terrible to happen and be unable to make payments or face default. The reserves keep you from spreading yourself too thin. I would look for 6 to 12 months of living expenses for reserves.