How Much Money to Have in Reserves in Property

There are property investors who dont think to have reserves and then there are us prudent property investors who always think of how much to have in reserves for property. Ideally the more properties you own the less per unit of funds do you need per property. More so depends on the types of properties. Could be working tenants, students ,LHA etc. With LHA the council really is your tenant. You get paid via universal credit or via the council. Your job is to manage the tenant or manage the estate agent who is managing your tenant & you will get paid. It used to be working tenants were the blue chip. Then came Covid-19 and some working tenants can not pay their rent. Nor can you evict them. Your only choice is to have reserves or have a deferrment on your mortgage. However who knows the real long term effects of that. This is why you need cash reserves. Yes, there will be those who disagree, however I side on the side of caution. I believe 6 months worth of mortgage payments, council taxes and just a bit more to be safe per property. We are in a unique situation as we do not have working tenants rather social tenants and are paid by the councils, charities or home office. Even so, no one rings a bell when there is a crisis and the prudent thing is to have some cash reserves.

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