Duplex Cash Flow and Duplex Home Repairs
If your duplex has a nice positive cash flow, that’s great, but one thing that should always be deducted from that gross cash flow is a monthly contribution to your repair expense account. Be it a plumbing issue, a roof repair or any other home repair that inconveniently pops up.
The amount deducted from your gross cash flow is a personal preference but your cash reserves should determine your monthly contribution. For example if you have liquid investments unrelated to real estate you may need a smaller cash flow allocation because you have it covered by other means. If you are more leveraged, with a smaller overall cash reserve a higher deduction is recommended.
Your duplex rental can always incur damage and having an appropriate repair fund helps avoid financial burden. The monthly cash flow on your property is not pure profit. It is monthly income that needs to withstand expenses that are unforeseen.