The amount of fiscal damages a bad tenant can accrue over time is far and above the small deposit you were to receive or loss in rents you are going to have.

But don't forget the appreciation that will accrue over the next few years....assuming you buy right and are not keeping it forever.For example, if you can get a $250,000 house that produces $25k net every year, you have 10% return.

From an investor's point of view a fund affords capital to all be placed at once in most cases save some sort of a pledge model and thus generally accrues a pref as soon as the capital is placed. 

We do accrue a monthly maintenance allowance and have taken estimates at the useful life of items such as appliances, roof, furnace, etc. 

Or the pref doesn't accrue and is never paid out at all. 

I'd put those in T-Bills, and continue to accrue & save up.

@Steve Might,Because the property taxes were prepaid by him and you are reimbursing his cost, they are not accrued yet, you will expense that cost they will accrue during your ownership period.

I am closing on a HELOC for my investment property next week and they advertised "interest only payments" during the draw period but when I read the final contract that I will be signing it reads "minimum monthly payment will be the greater of $100 or the accrued finance charge, plus any fees and amounts past due." 

I didn't buy another until age 46, then I accrued 33 rentals and 135 storage units in five years.

@Shady ForbesIf you don’t buy it and foreclose and take the property you will have to pay for it then, so your better paying for it now vs letting it accrue all the interest