$500 per unit. I go up, I go down from that…depends on the time of the month. I normally like to not spend money in the beginning of the month if I can at all help it to keep cash reserves high, but I know it’s ok to spend it too.
Now, 500/unit is not enough if you own one or two places…
I’d say a minimum of 4 months of your month-to-month personal+business expenses…with rentals you can push that timeline along too.
Ray Alcorn has said, “You don’t need money to buy real estate, but you do need money to stay in business.”
I’m a long term landlord and I know Ray is right, especially in today’s market. And I know the right amount of cash reserve to keep on hand varies with the times. You don’t want to hold too little, and you don’t want to be tieing up too much.
So for you landlords in today’s market, what’s a good guide nowadays for how much cash reserve to have for rentals? How much money per unit, for example? What rule of thumb do you use?