Tips For Building Cash Reserves During Coronavirus

If you own rental properties in Miami, there’s no doubt that you may be dealing with a difficult time financially right now since most  tenants are not currently working due to stay at home order.

The reality is that coronavirus will be over within the next 30-60 days and people will be going back to work but, until that happens, you should be focusing on doing everything that you can to build your cash reserves so that you can give yourself a financial buffer which will help you to get over the coming months.

Tips For Building Cash Reserves

Regardless if you own a single-family home, or a multi-family rental property, one of the first things that you should consider doing to build cash reserves is choosing a Home Equity Line of Credit (HELOC).

These types of loans are awesome because they obviously will provide you with the cash that you need immediately so that you can withstand a couple more months of your tenants potentially not paying their rent.

Since it’s getting more difficult for some owners to get approved for financing, you shouldn’t waste any time when it comes to applying for a HELOC with your lender because waiting another 30 days may make it impossible for you to be approved for this type of loan.

If you do get approved for a HELOC, you should withdraw the funds immediately and deposit them into your bank account because the lender will not be able to touch those funds and you can utilize them as a source of cash flow that you need to get you through the next 30-120 days if needed.

Besides choosing a HELOC, you may also want to consider choosing a cash-out refinance loan because, mortgage interest rates are still historically low and if you can refinance, this could save you thousands of dollars per year off your current mortgage payment.

Depending upon the rental property that you own, you should have at the very least $4,000 to $5,000 in cash reserves per property, or door. Having this amount will provide you with an ideal financial buffer that you can rely upon during times like coronavirus, or if your property needs a major repair within the next 12 months.

Contact Miami Property Management, LLC

To learn more about building cash reserves, or speak with us about the property management services that we can offer you, contact us today by clicking here.

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