Cash Flow allocation

[William C Catucci]

Hi all,

I own a cash flowing SFR anywhere from $700-$1000 a month depending on maintenance requests - Any guidance on what to do with this money? in a perfect world I would use it towards other lifestyle expenses, but is there a prudent allocation towards spending it vs. saving an appropriate amount for rainy day issues? Let me know your thoughts!

-Bill

[Jaron Walling]

If you're running the numbers correctly you should have more of a concrete number. $700-1000 per month doesn't feel accurate to me. If you're planning to hold this property for a long time having reserves is everything. When the roof goes bad, water heater goes out, or anything else breaks you shouldn't pay out of pocket for those expenses. 

I base my calculations off of 4% maintenance, 4% CapEx, and 8% vacancy. This money goes into a separate bank account. Any extra goes to me. If you're doing that already then you don't need advice. Cheers.