Reserves instead of monthly vacancy loss

[Evelin Montenegro]

Instead of doing an 8% vacancy loss every month, does anyone just keep a total reserves amount?

For example: Say your mortgage payment is $400 monthly so 6 months worth of rent is $2,400 and another $12,600 for CapEx repairs for a total of $15k and just place that into a savings account until needed.

I’m assuming there’s no issues with that, but no one really discusses that, all spreadsheets calculate a vacancy loss rate.

[Tim Herman]

@Evelin Montenegro it is just a reserve account for vacancy,repairs,capex, not three separate accounts. You would just move things around if you had different accounts. You have a vacancy and the unit needs painting. Which account would you choose to take the money out? It could come out of any of the accounts.