buy and hold question - Posted by rm

Posted by Dimpil on October 24, 2003 at 05:17:47:

I escrow 6 months of PITI. Yes it’s a lot but then the other side is, IF I had to make the payments for any reason I’d rather not scramble to come up with the payments, I’d feel more comfortable with it there ready to go incase of…But I’m over cautious as I’ve seen too many people miss payments on rentals relying on the renter to pay them who sometimes is late or vacates.

Now when I’ve established myself, have a working line of credit, have cash reserves I’d cut my escrow back to 3 months as I’d have enough financial back up to withstand a few deadbeats.

That my view.

buy and hold question - Posted by rm

Posted by rm on October 23, 2003 at 21:41:51:

Do you reserve 3 months’ costs with each acquisition?

Seems like a lot of money to have sitting in cash/equivalents.

If not, what rule of thumb do you use?

BTW, has landlord insurance gone up again?

I’m buying two homes tomorrow, each worth a fraction of my last, and my cost of insurance for each was not proportionally less.

Problem may be mainly due to the fact that there are only three sources for landlord policies in the state right now.