How Much Cash Do You Really Keep in Reserves?

[Stevan Stojakovic]

When you buy rentals or flips, what’s your comfort level for reserves — a few months’ expenses, six months, or do you go all in and keep cash deployed?

[Mackaylee Beach]

It's important to strike a balance between having adequate reserves and ensuring your capital is working for you. Many investors prefer to keep at least three to six months of expenses in reserve to cover unexpected costs such as repairs, vacancies, or market downturns. This cushion provides peace of mind and financial stability, allowing you to handle unforeseen events without stress. However, the exact amount can vary depending on your risk tolerance, the stability of your rental income, and the condition of the property. While keeping cash deployed in new opportunities can maximize potential returns, maintaining a reasonable reserve ensures you're prepared for the unexpected and can sustain your investments over the long term.