Having an emergency fund for repairs etc. 50% rule....

[Lee Melvin]

For some reason I do not like the thought incorporating the 50% rule when looking at cash flow etc.

Id rather just have a large enough emergency fund and deal with problems when they come up and not include that in your normal monthly numbers etc.

Assuming no property had any major foundational issues, how much money do you think would be good to keep in such a fund?

Also, excluding the repairs what % do you think would be good to deduct for expenses? 20-30%?

I am not even sure if I worded this right. Hopefully you guys get what I am talking about.

[Steven Hamilton II]

Originally posted by Lee Melvin:

For some reason I do not like the thought incorporating the 50% rule when looking at cash flow etc.
Id rather just have a large enough emergency fund and deal with problems when they come up and not include that in your normal monthly numbers etc.
Assuming no property had any major foundational issues, how much money do you think would be good to keep in such a fund?

Also, excluding the repairs what % do you think would be good to deduct for expenses? 20-30%?

I am not even sure if I worded this right. Hopefully you guys get what I am talking about.

@Lee Melvin ,

The 50% rule is the way to figure out what to keep as a reserve. In my honest opinion it is irresponsible to not consider large issues in your monthly cash flow. I've seen furnaces need to be replaced after 4 years and then a roof a year later. So I see it as either keep a HEFTY Slush fund or be prepared for anything.

You really should spend some time and look at the statistics behind the 50% rule. It is VERY accurate.