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Properties have an Operating Reserve to handle repairs
Properties have an Operating Reserve to handle repairs

Typically the reserve is 5% of the total purchase price.

Max Ball avatar
Written by Max Ball
Updated over a week ago

Each property has an Operating Reserve which is used for repairs. The Operating Reserve balance is equal to approximately 5% of the property purchase price.


Repairs are handled either by the professional Property Manager's in-house vendors or by local contractors in the area hired by the Property Manager. All urgent repairs will be taken care of immediately, and any non-urgent repairs requested by the resident will be put up for a Governance Vote. The owners of that property can then vote on whether they'd prefer the repair to be taken care of or not.

If a portion of the Operating Reserve is used, but the balance still above 50% full, owners voted to apply 10% of cash flow to replenish the reserve until it reaches 100% full.

If the Operating Reserve is below 50% full, owners voted to apply 100% of cash flow to replenish the reserve until it reaches 50% full and then apply 50% of cash flow until the reserve is 100% full.

The Operating Reserve balance is part of the property value. As a result, the property will increase in value as the Operating Reserve is replenished.

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