Denver, CO · Member since 2016 · 15 posts · 3 votes
Hello BP community,
I'm interested to learn what most investors do with the portion of rental income commonly set aside for cap ex, repair, and vacancy costs.
Does it go straight to the bank? Invested in CD's or a money market account?
It makes sense that this money be liquid to use at a moments notice, but it'd also be nice to get a return on this money, wouldn't it?
Best regards,
Adam Bearup
Denver, CO · Member since 2016 · 15 posts · 3 votes
9y
@Jeff Garzik,
Good point I was thinking along those lines as well. If you go that route, wouldn't you be stuck with paying the interest back on the money you borrowed from the HELOC, in the end having a net negative?
Assuming the HELOC would be replenished with monthly rental cash flow. Which would take a long time if you're pulling out $10K for a new roof, or something of that magnitude.
Investor · Atlanta, GA · Member since 2017 · 40 posts · 20 votes
9y
If you assume the money that would otherwise be sitting around is actively invested in the market producing returns, you shouldn't wind up net-negative.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
I'm content for now with my Barclays online savings account getting 1.05%. I like that it is separate from my other accounts so I only see it quarterly when updating net worth. Auto deposits from each property are the way to go.