Build reserves or next property?

[Brian R.]

I find myself at a choice. To buy my third rental property or to pad my reserves.

I would say I have pretty health and conservative reserves. While not my target should I want to sit and start siphoning off my cashflow ['up and running maintenance mode'] I am thinking a third property would speed up the flow of my cashflow to fill my reserves even higher even quicker and help make my portfolio even more buoyant [3 properties with one vacant is 66% occupancy vs. 2 is 50/50 or 1 being 100/0].

Didn't know if people had a rule of thumb they follow or like [ie. after 75% of target reserve fund goals are met the next investment can be made.]

[John Knisely]

Hey @Brian R., I look at cash reserves as what I want to have AFTER acquisition of a property. So it really depends on your next acquisition I think. If you're going to put down so much of your own money that you'll be below your target cash reserves, I'd say you should either wait or try and restructure the deal to pull less from your own pocket. It can be a slippery slope to start adjusting what you think is an acceptable amount of reserves to justify another property. Of course this all is dependent on what you can fall back on in terms of friends/family support, job prospects etc.