Maintenance reserve

A reserve lets you pay a vendor on time. Agree how much it holds and when it is topped up, and show every draw on the owner statement.

The amount is set in the management agreement, often a flat sum per property or per unit. Repairs are paid from it and the owner tops it up from rent or a transfer. A reserve that runs dry means a vendor waits to be paid, and vendors remember who pays slowly.

An example

An owner of a fourplex keeps $1,000 with the manager. A $380 plumbing repair is paid from the reserve the week it is done and shows on the owner’s monthly statement with the invoice attached. The next month’s rent brings the reserve back to $1,000.

What to write down

• How much the reserve holds, per property or per unit
• When and how it is topped up
• Which repairs can be paid from it without asking first
• How each draw is shown on the owner statement

How Now Ours handles it

You set the spend limit for each property. On Cautious, the default, Ours asks you before it spends money. On Standard it approves up to that property’s limit and asks above it. Paying vendors from the reserve stays in your accounting. See owner approval and NTE.