buffer - How much is eonugh

I have 2 IP's @around 90% LVR. Im NG on IP # 2, but after tax return and depreciation it will be neutral to cash flow positive. IP # 1 is cash flow positive by a lot. Im in a stable permanent public service job. I have good SANF with minimum $20,000 in my bank. I've got $23,000 at present and with all my expenses I'm still able to save a bit each month which is good. :)
 
I have a decent buffer now but for a while there it was pretty low. The best buffer you can have is health, determination and humility. That way you can do whatever it takes to deal with any situation. That's my high risk profile speaking ... and experience. Nice to have a buffer though. On the downside it makes me want to quit work.
 
I like to keep a buffer of about 2 years expenses or more. I dont think 5k per property is enough perhaps it would be enough if you had a lot of properties and they were in diverse markets.
 
$5K per property? But how is much the property??? How much is the risk??? The buffer should be proportional to the risk and that which you feel personally comfortable with.
 
Alex, figures looks good. Hope you got heaps of flexi time banked up as well....it comes in handy especially if you tend to nod off at work lol
 
I like about $10k per property myself, $5k definitely isn't enough as 60 days vacancy can suck up most of this, throw in a repair or two and it's gone. Insurance may save you in the end, but not always immediately.

Then there's the argument of how many properties can have problems at once. In theory it might only be 5% - 10% of your portfolio, or 2 properties at any given time (whichever is greater). Last week I was chatting to a client who had about 50% of her portfolio vacant at the same time for an extended period (which in her case is a lot more than 2 properties). Combined with some repairs from a lousy tenant and things got interesting...
 
I like to keep 6 months as a minimum, but will go below this if required. Have emptied most of the savings a couple times. But purchase was well worth it and I knew I had a lump sum coming to top it back up. Also add in very stable job. Few months of sick leave, month of annual leave, long service leave, landlord insurance and just set up reasonable amount of Risk insurance. So sleeping easy at night.
 
After i purchase my 5th IP this week i'll only have roughly 2 months worth of repayment money in my offset account as buffer if all my properties decided to be vacant...*touch wood* *pray to god* *finger cross*

My goal is to stop buying for 6 months to 1 year to bring my cash account back to be able to support repayment for up to 6 months.......
 
Thanks to this post, going to have abit more saved up as a buffer. I hate living life dangerously and not so young now anyway :)
 
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