In addition to cost contingencies, many investors will set aside a capital reserves fund which essentially serves the same purpose later on.
In addition to cost contingencies, many investors will set aside a capital reserves fund which essentially serves the same purpose later on. These funds can be used for unexpected expenses and are built into the operating budget. Overall, by planning for these costs throughout the investment process you can avoid situations where you are strapped for cash. When it comes to commercial investing, cost contingencies and cash reserves are a crucial component of the process.