All Forum Posts by: Jared Fisher

A lot of this will depend on your (and your spouse's if applicable) job security.

Freelance, self-employed, start-up vs government, union, blue chip tenure, etc. 3-6 months basic living expenses as personal reserve. 6 months if riskier employment situation. 

Property is based on vacancy rate and repairs/cap ex, rehab estimates plus 3 months piti in general.  

When I had 3 dozen, I'd keep $30k as portfolio reserves.   Had a couple $24k outflow months.

I like $5k per average house that doesn't need a lot of work as the staple. 

 

You can't look at it as how many months of reserves. X months of reserves will help you out in the event of a vacancy between tenants, but it's ignoring the potentially much larger ticket expenses that could come up.

As others have stated, you should more importantly look at the condition of the property, and anticipate the next couple years worth of repairs. 

If you're renting an old home built back in the 1960s with a 25 year old roof and a 60 year old cast iron sewer line, I'd recommend having ~$15,000 in reserves for that property. At least.

But if you're renting a 2010 built home with newer systems, it makes more sense to just keep a few months worth of reserves on hand for a vacancy and misc handyman bills.