What is an Emergency Fund?

March 15, 2021

For the landlords and real estate investors, ROI and cash flow are everything. You’re constantly on the lookout for ways to make your rental properties more profitable, which means maximizing the upside and counteracting the downside so that it doesn’t come back to bite you. And even though there are no bulletproof methods of downside protection, there is one method that can significantly lessen your chances of experiencing a financial catastrophe. It’s called an emergency fund.

Rental Property Emergency Funds: What and Why

In the simplest terms, an emergency fund is a source of stable and liquid assets that you’re able to draw on in an emergency or unforeseen situation. This may include a sudden repair, maintenance issue, or prolonged period of vacancy where there is no income to offset expenses and bills.

As a general rule of thumb, you want at least three to six months worth of expenses inside your emergency fund. Thus, if it costs you $2,000 to pay the mortgage and all bills associated with the property, you’ll want somewhere between $6,000 to $12,000 in your emergency fund account.

In order for it to be considered an emergency fund, the money needs to be accessible, yet out of reach. It should be in its own checking or savings account separate from the rest of your personal or business expenses – clearly designated so that you know which property it belongs to. An emergency fund should not be tied up in risky investments like stocks (or even bonds and CDs, which can be difficult to convert to cash in a timely fashion).

A properly stocked emergency fund does a few things, but it serves two primary purposes:

  • Protection. The purpose of an emergency fund is to protect you in a situation where a sudden expense emerges. It allows you to easily float the cost without having to take out a loan or delay a much-needed repair.
  • Peace of mind. Your emergency fund shouldn’t have to be tapped very often. Most of the time it simply provides peace of mind so that you don’t have to worry about potentially negative outcomes, like not finding a tenant or getting an expensive home repair bill.

In other words, you don’t want to do without an emergency fund. Doing so is like walking on thin ice in the middle of a frozen lake. You might be able to tiptoe around for a while, but you’ll eventually find yourself in trouble.

If you are looking to hire a Property Management company to manage your property then consider hiring ACCL Property Management. For free consultation, please email us at info@acclpropertymanagement.com or call us at 905-432-8961

5 Things to Consider Before Purchasing a Rental Property

December 21, 2022
Expert Advise From Your Trusted Property Management Team

Get Your Property Rental Ready for Winter

December 7, 2022
It is important for landlords and property managers to take the required steps to ensure that their rental properties are ready for the winter months. You will want to be proactive with inspecting the plumbing, roof and landscape before the cold winter temperatures and winds set in. Doing this will guarantee that you will save money on damages that may occur if these areas are neglected.

Avoid These Property Management Blunders

May 15, 2021
If you want to earn as much as you can on your investment properties, it’s worthwhile to use the best property management team you can. If you encounter any of the mistakes below in the management of your portfolio, you may want to switch to a different management firm.

9 Maintenance Tips For Your Rental Properties

May 1, 2021
If you own rental properties in Oshawa or Durham Region, it’s crucial to maintain good relations with your tenants. One way to do this is by hiring a quality property management company to handle the upkeep. Are you looking for advice on how to maintain your rental properties in Durham? Look no further. Below are nine critical tips to protect your investment and keep your renters happy.

Tenant Screening: How Landlords Can Effectively Screen Tenants

April 15, 2021
Screening tenants is one of the most important tasks landlords are responsible for. Applications come in by the dozens for every apartment and it’s their job to sort through them, run the appropriate checks, hold interviews, and determine who will live in your properties. As a result of this constant work, most landlords have a clear sense of what red flags they need to look out for when reviewing applications, but it’s important to realize that not all problems are equal and that individuals with “red flags” on their records may not be bad tenants.

How to Build an Emergency Fund

April 1, 2021
1. Organize Your Bank Accounts

5 Tips for Finding a Good Contractor

March 1, 2021
Find a good contractor who gets the quality work on time is never an easy task. As you search for a contractor to work on your property, here are some tips and tactics you can leverage to filter out the bad apples and find the right fit for your project.

7 Techniques For Rent Collection

February 15, 2021
5 Techniques Successful Landlords Use For Rent Collection

4 Ways Landlords Waste Money

February 1, 2021
As a landlord, you’re in the game of generating cash on your cash. In other words, you’re in the ROI business. But are you really doing everything you can to set yourself up for maximum returns? This a question that you need to analyze through a critical lens. You might consider yourself a fairly savvy person when it comes to finances and investing. (After all, you’re wise enough to invest in an income producing property.) But it’s entirely possible that you’re bleeding money in areas where you could be doing better.

The 5 Advantages of Real Estate Investing

January 15, 2021
If you want to build wealth, prepare for retirement, or otherwise improve your financial situation, you’ll need to invest your money. Investing gives you the potential to earn money on your existing capital in a volume that outpaces inflation, ultimately helping you multiply your capital over time. One of the most common forms of investing is buying stocks and bonds—two types of reliable assets that are easy to buy, hold, and sell. However, stocks and bonds aren’t everything, and they may not be appropriate for all investors. Instead, you might consider real estate investing, which has several advantages over other forms of investment.