💡 Thursday Landlord Tip
Before we start managing any property, we ask the owner to confirm one thing that has nothing to do with the management fee: a reserve of at least three months’ rent, set aside, per property. It’s not California law. It’s not boilerplate. It’s the line in our onboarding risk disclosure that new owners skim fastest — and the one that matters most when something actually goes wrong.
What We See at AEBP
We’re not asking for a reserve because a big repair is likely on any given property. We’re asking because when one hits — a failed water heater running $2,000–$2,500 in the East Bay, a roof leak, a stretch of vacancy between tenants — the reserve is what determines whether that expense is a Tuesday or a crisis. Our risk disclosure says it plainly: property ownership carries risk no property manager, including us, can eliminate. The gap we see most often isn’t the repair itself. It’s that nothing was set aside to absorb it.
“Not that the expense happened — that nothing was set aside to absorb it.”
What To Do About It
- Multiply your monthly rent by 3 — that’s your minimum reserve target, per property.
- Set that amount aside in a dedicated account before you sign with any property manager, not after.
- Revisit the number every time rent increases — a reserve sized to last year’s rent falls short this year.
- Ask any property manager you’re evaluating whether they require a written reserve confirmation. If they don’t ask, that’s worth asking why.
💡 This Week’s Takeaway
The management fee is the number every owner reads closely. The reserve requirement is the one that actually protects you when a vacancy or repair hits at the wrong time. Three months’ rent, set aside, before you need it — not after.
📘 Learn More
This tip is one clause out of nine in AEBP’s standard onboarding packet. For the full breakdown — including the spending-approval clause and the tax withholding rules for out-of-state owners — read What’s Actually in an East Bay Property Management Agreement.
