Why do Manchester landlords need a cash reserve?


Successful property investment can be conducted in a hassle-free, hands-off approach when done correctly, and managed efficiently. As with all manners of life, however, things can and do go wrong, and at times with property, it isn’t always going to be cheap to rectify.



Hardened property investors will have crafted and honed their strategies during their time in the sector. Meticulous research for sourcing areas and types of property, finding the best development team or contractors to work with, and having a knowledgeable and proactive management agency in place to manage the tenancies. But one crucial component that needs to be factored in, regardless of how experienced you may or may not be in the sector, are contingencies.

Now, more than ever, Manchester landlords and property investors need to have back up plans in mind for their entire investment strategy and even plans to back up the backup plans. No amount of contingencies built into your strategy will ever be too many; whether you’re a first-time landlord or seasoned property investor.

Particularly in the current circumstances driven by the ongoing Covid-19 pandemic, many are finding their personal circumstances are far more difficult than they were back at the start of the year. People are fearing for their jobs, their homes, and whether or not they’ll have enough pasta and toilet roll stocked at the fear of a sudden shortage in the supermarkets.

In the same way that people are stockpiling supplies during these hard and uncertain times, landlords should also be stockpiling reserves; not only to traverse the unpredictable path of the pandemic, but as standard even if/when things eventually settle.

What do landlords to create a cash reserve for?

– Maintenance

Properties aren’t going to look after themselves; they require human intervention, tender care, and regular checks to ensure everything is ticking over as it should be. Proactive maintenance allows for any issues to be rectified quickly before they become a larger problem, saving costs, time, and any potential hassle of having to lose a valuable tenant. With that said, maintenance can be one of the most costly factors to consider when it comes to property investment. Hardened investors not only include maintenance as part of their cash reserves, but have an entirely separate allocation committed to maintenance. Maintenance of a property very much falls to the responsibility of the landlord.

– Void Periods

The nature of the beast in the rental sector is that tenants will come and go. The primary objective should always be to secure long-term tenants who take care of your property as if it were their own, but the chances of this aren’t always guaranteed. As a result, the transition period between tenants will always put a halt to proceedings when it comes to income. Having a proactive management agency who are on the ball with advertising and sourcing the best tenants is a solid method of minimising void periods. However, this isn’t going to guarantee your rental income for a certain period, no matter how short or long. Having money nested to cover any gaps when it comes to void periods is almost as sensible as the decision to be a compliant landlord, who strives to take care of their tenants who in turn, will be more likely to take care of your property.

– New eviction rules and rent protection

The new eviction rules that have been implemented during the pandemic are tailored to protect tenants; the idea being that tenants who are unable to pay their rent as a result of impacts had by the pandemic aren’t going to be penalised. This does, however, mean that unscrupulous tenants who are refusing to pay their rent for other reasons have the ability to live in your property without paying any rent. As it stands, this can be up to six months which is a substantial amount of time to not be receiving rent payments; particularly if a tenant isn’t taking care of the property.

We strongly recommend taking out rent protection insurance to give you extra peace of mind; particularly during the current climate. In the event of a tenant being unable to / refusing to pay, the scheme kicks in with rent payments immediately. In the event of arrears, they will begin to mediate an agreement surrounding this behind the scenes. Moreover, if a solution cannot be agreed upon by mediation, the rent protection scheme will pursue an eviction in court whilst still ensuring your rental payments up until the point of eviction (maximum of six months).

For £225, landlords can benefit from 12 months of cover on their property. The payment is tied to the property itself rather than a tenancy. This means, for example, if a tenant was to leave during the sixth month of your rent protection payment, and re-let the following month, the policy would still continue (providing the new tenant passes the appropriate referencing and credit checks). It also guarantees £100,000.00 of legal cover.


Property is best served as a long-term investment, so planning ahead is crucial in order to see successful results. Having a cash reserve as a contingency throughout this period will always serve you well in the bigger picture; taking the strain in the event of any unforeseen or spontaneous events. This will allow you to act quickly which in turn, will help to keep your tenants happy, thus aiding to create a happy, long-term tenancy to ensure your rental income.

For more information on how to manage your cash flow in property investment or how best to manage a cash reserve, give us a call on 0161 883 2525,

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