+R6 Rate of Return
Expected annual return on a 6-month reserve fund (1% — savings account).
Example Result
Sample DataBased on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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+R6 Rate of Return Formula
1% (savings account rate)
Why It Matters
Reserve funds should be liquid and safe — this is emergency money, not investment capital. A 1% return reflects the reality that safety and liquidity come at the cost of lower returns. The small return partially offsets the opportunity cost of holding cash.
Detailed Explanation
The +R6 Rate of Return models the yield on a conservative 6-month reserve fund held in a savings account or money market fund. At 1%, this represents the opportunity cost of keeping cash liquid and immediately accessible.
Example
Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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