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Updated over 7 years ago on . Most recent reply

User Stats

25
Posts
6
Votes
Aaron Jones
  • Investor
  • Edmond, OK
6
Votes |
25
Posts

At what point do you have "enough" reserves?

Aaron Jones
  • Investor
  • Edmond, OK
Posted

Hey everyone!

Not sure if this is most appropriate forum, but here we go:

In my analysis, I deduct 25% from gross rent to account for repair and maintenance, Capex, and vacancy, and to build up reserves.

My question is, should I stop saving for reserves after a certain amount is met? Or should I perpetually add to my reserves for a particular property? For example, let's say over the course of 3 yrs. I accumulate reserves of $10k in cash for a $100k property in decent shape. Assuming there are no looming big ticket items that I am aware of, would you/should I continue to save for reserves, or just maintain that reserve and replenish as expenses arise?

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