I'm sure everyone has there own strategy. As of now and for the properties I currently own I do not consider reserves at all when renting. Based on what the report says, whats the point? Most people do what they have to do just to get by. Many people are life tenants, probably for this very reason. If a tenant is hit with unexpected bills and cant afford rent they move to compensate or I evict. Moving to a place for less rent is the fallback plan, that is how they make up the money. When they are back on there feet they will move back into a nicer apartment. Its the cycle of the life tenant. Good life tenants simply do not want the responsibility that comes with home ownership. These are the prizes we look for as landlords. For the most part this just means that 3 out of 5 Americans will be renting for the rest of their lives. Pretty good odds of collecting rent if you ask me. There will always be some risk if you want reward, be the 2 out of the 5 and I think life will be grand.
