The $8,000 Leak: A Real-World Reminder Why Reserves Matter

Every landlord’s nightmare became my reality while I was on vacation.

At 6 a.m. on a Sunday morning, I got a message from one of our tenants in Florida — there was a leak. Not just a dripping faucet or a loose fitting — a slab leak, the kind that sends a cold jolt down any property owner’s spine.

Thankfully, the tenant was quick to act. We had them shut off the water at the main, and I contacted a local plumbing partner who was able to get out to the property within a few hours. After further inspection, our fears were confirmed: a copper pipe had failed underneath the slab — a known issue in this market — and this now marked the fourth unit we’ve had to re-pipe due to similar problems.

By some stroke of luck (or fate), my family and I happened to be in town on vacation, so I was able to personally oversee the situation. Here's how we handled it:

• Carpet removal to prevent mold and speed drying

• Industrial fans and a dehumidifier brought in immediately

• Drywall and baseboard cut 6–8 inches from the floor (no moisture detected with a meter, but we didn’t want to risk it)

• 96-hour drying period with equipment running continuously

• Drywall & painting contractor brought in for a full room (and full house, once we committed to a complete re-pipe)

• New carpet and padding ordered

• Re-pipe scheduled and completed

The Cost Breakdown:

• Carpet and Padding: $527.84

• Drywall, Trim, Paint, Finish Work: $2,200.00

• Paint Supplies: $87.70

• Full Re-Pipe: $5,242.20

• 🔻 Total Out-of-Pocket: $8,057.74

Yes, we’ve submitted an insurance claim and are optimistic about some coverage, but this situation reinforces a point I think many newer investors overlook: you must be well-capitalized.

The Reserve Rule We Live By:

We personally aim to keep a minimum of $10,000 in reserves per door. When we dip below that number, we aggressively save to rebuild our cushion. This gives us peace of mind and flexibility when the unexpected (but inevitable) happens.

Whether it’s a slab leak, HVAC failure, roof damage, or a tenant issue — you don’t want to be scrambling for cash when time is of the essence.

So Let Me Ask You:

👉 How much do you keep in reserves per unit?
👉 Have you had to dip into reserves lately, and what did it teach you?

I don’t share this story to scare anyone — but rather to emphasize the importance of building your portfolio defensively, not just optimistically.