An important part of successful rental property investment is proper cash reserves. Each property is different, therefore the amount of the reserve can also be different. Some things to consider:
By having a reserve, you will decrease the stress of owning a rental property and will actually make more money. For example, the ability to quickly replace a bad water heater can mean the difference between the Resident leaving because they are unhappy or renewing their lease. Not having to find a new Resident will save on leasing costs, vacancy cost, and make ready costs. In addition, proper reserves will help you keep your contractual obligations to the bank, the city, and the Resident.
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