How much to keep in reserves for first property?

[Derek Luttrell]

Hi All, 

I close on my first investment property in three weeks, and I'm wondering if it's common to inject a certain amount of reserves in the property's bank account right off the bat. Purchase price is $122,000 and rent will be $1450, and I was anticipating keeping 6 months of PITI as a starter cushion, and then build on that as rent checks start coming in.

For all future properties, I'd like to consider 6 months of PITI as being part of my initial investment/cash needed at closing. Please let me know what your common practice is! In the same vein, is there a point where you stop building a property's reserves and start allocating those monthly funds elsewhere?

[Derek Luttrell]

@Matt K. so you're saying if you have a good sized personal credit line that could cover any major incident, your preference is to put actual cash to better use instead having it wait for a rainy day? I can see the appeal of that, but I also like the comfort of having one property's reserves established so I can focus on the next one.