Cash reserve rule-of-thumb
Everyone should have a cash reserve for both daily and unexpected or extraordinary expenses. The general rule is three months’ worth of expenses, meaning if you spend $5,000 per month on housing, food, transportation, leisure, etc., then it would be prudent to have $15,000 in some interest-bearing but liquid vehicle that you can access quickly and without penalty or loss of principal.
This rule also applies to investment property. Your cash reserve should be two to three times gross monthly rents, so if a property rents for $1,000 per month, then a $3,000 reserve would be prudent. The actual amount you should keep depends on your unique situation. Folks who have low interest credit lines available may choose to keep less and deploy their cash in more productive ways (invest or pay down debt), whereas someone who has to replace a roof later in the year should keep significantly more.