How Much Liquidity To Carry In Your Portfolio

[Bryan Hancock]

For those of you with sizable rental portfolios with debt on them I was wondering how much cash you keep as an overall percentage of your long-term debt. We have been targeting 10% liquid for every dollar of long-term debt. With this constraint we have limited our debt burden and kept ourselves from being overleveraged.

Does anyone else use metrics like this or something else to determine how to prudently grow a long-term portfolio? We also use debt to equity ratios, but I find those less reliable than analyzing cash as a percentage of debt.