September 9, 2026
The reserve line, and why our cash flow looks lower
Roofs and furnaces are lumpy and certain. A model with no line for them overstates every year of a projection, and the error compounds.
Neil Greene
September 9, 2026 · 1 min read
Most listing sites show you a cash flow that does not exist, and they are not being dishonest about it. They are leaving out the part that is hard to put a number on.
The line nobody prints
A roof lasts twenty years. A furnace lasts fifteen. A water heater lasts ten. None of them costs anything in a given month, and then one of them costs six thousand dollars in a single afternoon.
A model that charges nothing for them shows a property paying its way in every year of a twenty-year projection. The error does not sit still either: it compounds, because each year of overstated cash flow is reinvested in the next one.
Every Datum listing reserves for this separately, at a rate you can change.
It is not maintenance
Maintenance is the tap that drips and the lock that sticks. It happens every year at roughly the same size, and a percentage of rent covers it honestly.
A capital reserve is for the things that:
- fail completely rather than gradually
- cost thousands rather than hundreds
- are certain to happen, on a date nobody can name
Lumping the two together gets you a maintenance figure too big to believe in an ordinary year and far too small for the year the roof goes.
What it does to the numbers
It makes them worse, and that is the point. A property clearing $180 a month with a reserve is one you can actually hold. One clearing $340 without a reserve is the same property with a bill you have not been shown yet.
The figure is on every listing, it is a percentage of gross rent, and you can change it. If you think 8% is cautious for a house built in 2019, set it lower and watch every figure on the page move.
