Investor Reserve Fund: How Much Cash to Keep “Under the Pillow”

Investor Reserve Fund: why it matters 💡

An investor reserve (emergency) fund is a dedicated amount of money for unexpected costs. For property buyers and landlords, it helps handle urgent repairs, temporary vacancies, tax or administrative costs, and personal income drops. In a market you are still learning, it becomes a safety net for sound decision-making.

How much should you keep? 📊

There is no single number that fits everyone. Use a practical, risk-based approach:

• Base your reserve on your actual monthly costs and add extra for property-related surprises.
• If your income depends on rent or seasonal tourism, consider a longer buffer to cover slow periods.
• For active investors, include an amount for renovations, standing costs and potential legal fees.

Treat common recommendations as ranges rather than fixed rules. The goal is to avoid forced sales or high-stress decisions.

Where to keep your reserve: safety vs return 🔐📈

Options to balance liquidity, safety, and modest returns:

• Liquid bank accounts for quick access and low risk.
• Foreign currency accounts if you deal with international transactions.
• Short-term deposits that allow partial withdrawal when needed.
• Cash for immediate emergencies — but don’t keep large sums at home.

Choose based on how quickly you may need funds, transfer costs and currency needs in Georgia.

Calculating a reserve for property in Georgia 🇬🇪

A simple step-by-step method:

1. List your monthly personal expenses while living in Georgia (rent or mortgage, utilities, food, transport, health).
2. Add expected property-related costs: maintenance, vacancy periods, taxes, agent fees.
3. Multiply monthly needs by your target buffer (a reasonable month range) and add a separate repair contingency.

For buyers: prioritize a reserve that covers living expenses plus a repair/maintenance cushion. For investors: increase the buffer to account for possible longer vacancies or unexpected capital repairs.

How to build and replenish the fund 🔁

• Automate transfers to your reserve account every month.
• Allocate a portion of rental income to the fund before distributing profits.
• Replenish promptly after using the reserve — treat withdrawals as temporary loans to yourself.

Automation helps the fund grow steadily without compromising your investment plan.

When is it okay to use the reserve? ✅

Use your reserve for genuine emergencies and strategic moves:

• Urgent repairs or unexpected property expenses.
• Temporary loss of income or prolonged vacancy.
• To avoid selling assets at an unfavorable time or to secure a time-limited opportunity.

Avoid using it for discretionary spending or speculative investments.

Practical tips for investors in Georgia

• Understand local cost drivers: utility rules, seasonal rental demand and service costs.
• Keep part of the reserve in a stable foreign currency if you expect cross-border payments.
• Learn local tax and legal requirements to estimate potential extra costs.
• Check bank transfer options and fees when moving money between countries.

Final thoughts — protect stability, keep options open 🌱

A reserve fund is not just a cost, it’s insurance for decisions. It ensures you can wait for better market conditions and manage surprises without panic. Aim for a balanced, diversified approach to storage and automate replenishment to keep momentum.

If you're planning to buy or invest in Georgian property and want help calculating the right reserve or budgeting for a purchase, our team at BuyHome can assist with tailored guidance and property selection. Contact us to get started: https://buyhome.ge/en