this question is for buy and hold investors. How much cash do you think is a good amount to hold per rental house? for such things as repairs and vacancies?
@Diane Stinebaugh I like to keep around 10k per house at least. 10k is usually more than enough to cover anything that might go wrong at any given time.
I also think it matters how many you have, if you have one property you need more reserves than if you have 100 properties. 10K a house cited above might be about right for a person with 1-5 units but if you have 100 units setting a million bucks in reserve accounts is probably excessive, since its unlikely all 100 units will have a problem at the same time.
Definitely an "it depends" question. For example, my duplex has brand new furnaces, hot water heaters, and AC units, and the roof is 5 years old. Unlikely any of that capex will be needed real soon. But, you never know when a tree root will plow through your septic system or water line. I'm personally keeping $5k cash on hand for this duplex, but also not paying myself with the cash flow either. Rather, I'm reinvesting anything much higher than my reserves at the moment. If not for the new HVAC, I would want to keep $10k handy.
thanks, everybody! I have two older homes and looking to invest in another house. So whatever isn't saved will go towards more investment.
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