Saving for reserves.

[Michael Puwal]

The Bigger Pockets people often talk about putting capitol expenses, operating expenses, vacancies etc, in the budget when analyzing a property.  What are general practices for this?  Do you stop after saving enough for 6 months reserves?  Do you save the money for ever?

[Mindy Jensen]

@Michael Puwal, what @Kevin Harrison said makes sense. Save until it feels comfortable to you. What would you do if the roof needed repair at the same time the furnace broke and the hot water heater leaked everywhere? Or the AC broke and the appliances all gave out at the same time?

No, it's not likely, but it's also not impossible to have multiple things break at the same time. Have a reserve that makes you comfortable, then add a little bit more so if you need to dip into the reserves, you aren't feeling nervous.

Then save for the next property's down payment!