Cash to Equity Position

[James Lipko]

What is a typical cash position that you should maintain as a landlord to have for repairs, emergency expenses, buying opportunities, renovations, etc?  I am looking to purchase my first rental property. I know what I can afford, but I am unclear how much of a cash position I should maintain after the purchase. Does $20,000 sound like that is enough? 10K?

[Tayo Black]

Regarding repairs and emergency expenses -- that would depend on the condition of the property. A rough guideline would be to reserve less if your property is newer and in great condition, and more if your property is older and the previous owner didn't take as good care of it.

Definitely check the BiggerPockets Rental Property calculator (Tools -> Rental Property) -- it not only does the calculations for you, it also provides explanations for what each input item is. Sounds like you'd want to focus on better understanding CapEx, reno/repairs/maintenance, and vacancy reserves.

Hope this helps!

*Tayo