Rental Property Investor · Toronto, ON · Member since 2019 · 3 posts · 1 vote
I am looking into buying my first property in the Toronto area. I am very close to saving up all the required funds for the down payment, land transfer tax, etc..
I was wondering how much cash would be recommended to have left over once the home is purchased?
Rental Property Investor · Batavia, IL · Member since 2018 · 452 posts · 672 votes
7y
@Etienne Ma There are a couple factors to consider:
1. How much extra income do you save each month after expenses with your job? The more money you have after expenses each month the more ability you have to handle an unexpected expense.
2. What kind of condition is the property in currently? The more work that might need to be done shortly after purchase the greater the reserves you should have.
3. Do you have additional money besides that used for investing? This would be an emergency fund, other savings etc. If you don't have any other funds or access to credit lines I would have a higher reserve.
With that being said, depending on the condition of the house I would try to have at least $5,000 in cash reserves available should you have unexpected expenses before you have enough time to accumulate reserves from rental income.