Author Topic: Where to invest rental operational account and other ~3 year funds?  (Read 595 times)

bearman

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Hello mustachian army - I've been busy plugging away at building my (small) rental empire and am now ready to pivot to the final chapter on my FI plan:

1. Set up a $50k operational fund for the rentals. Basically this is for planned major expenses like a new roof, and I would need to make a withdrawal or two a year from the account.
2. Build up $100k-$200k liquidity to eventually (maybe) payoff some mortgages or (maybe) get another rental in the future or (more likely) do nothing with but simply feel good knowing I have easy access to capital. In all likelihood, I'd use at least part of this money in some way within the next 3 years.

So my questions are:

--Any suggestions for where/how to invest for these two? My thought was the Vanguard Money Market fund for #1 and the Vanguard Total Bond fund for #2. My goal for both is to preserve capital and get the max safe return. Only difference is the time horizon.
--I've been reading that increasing interest rates will affect bond performance. Do I need to actively do anything to avoid decreased returns if I'm in a Vanguard Bond fund? Or do the folks behind the scenes there figure out the best way to navigate changing environments?

To prevent any rabbit trails: Yep, already maxing 401k's, tIRA, HSA and no debt above 5%. I'd prefer not to pay extra on mortgages yet, because I'd rather have liquidity for the next few years.

Any thoughts? Thank you!