rental property with no mortgage. how much is a good idea to save for emergencies?

skaps

My husband has a property which has no mortgage. Tenants are in and a few months rent had been paid. How many months of rent should be left in the account for emergencies for this property? Any advice would be appreciated. Thanks in advance. The house we live in has a mortgage.

ognum

skaps wrote: »

My husband has a property which has no mortgage. Tenants are in and a few months rent had been paid. How many months of rent should be left in the account for emergencies for this property? Any advice would be appreciated. Thanks in advance. The house we live in has a mortgage.

What do you call emergencies, does in include tax? If it does then it depends on your tax threshold 20%/40%.

Then it depends on the property, so you have to pay service charges and ground rent on a flat. Do you have any insurance covers for central heating etc, what are the monthly outgoings.

You know you should have this in your buisness plan but I keep my rent payments in a separate interest generating account until the end of the financial year, I pay the tax man and then pay myself.

Mallotum_X

as said worth keeping back monies for tax.

Then for emergencies, think of the major items of expense you could be hit by, eg roof repairs, new boiler, and make sure you have savings to cover 2 or 3 of the most likely big bills.

anselld

Most "emergencies" are self-infliced through lack of planning or lack of maintenance.

The largest single uninsured expense is likely to be a sudden boiler failure, circa £2000.

Even then you can predict your risk to some extent based on the make and age of the boiler.

Tax you can plan for.

Roof should be inspected regularly and maintained as necessary, meaning you will get plenty of warning of major repair needs.

Lengthy rent void / legal fees due to "professional tenant" is another risk, but again mitigated by dilligent referencing.