A property can incur expenditures at any given time of the month. Utility bills may become due, repairs may need to be addressed and vendors will need to be paid.
In order to maximize efficiency of operations and to ensure expenditures are paid on time, it is important that management have some funds available. This is where “reserve” allocations comes into play. Management will typically hold aside a set dollar amount per unit (usually $300.00). The application and distribution of these funds are always clearly displayed in the owners financial records. and will automatically be replenished whenever a property generates income.