Positive Cash Flow on Rental Property
A rental question from a reader:
....do you have positive cash flow on all your rentals? The reason I ask is that my wife and I have 20% for a home and are not sure we would cover the mortgage of our condo if we decide to rent it out. The rent would be $50 to $100 less than the mortgage and I know you can take the tax loss.
We have positive cash flow on both our rentals. Both properties had 20% down and were originally financed with 80% 30 yr fixed rate mortgages (purchased in 2002 and 2006).
Do you need positive cash flow on rental properties to be profitable? To me thats a different discussion. Either way I would really need to crunch the numbers to understand what kind of return I would expect before I decide to purchase or convert a rental property. Another factor would be whether or not I would have positive cash flow.
Here is another post detailing an analysis of the performance of our first rental property.
Im not surprised your not achieving positive cash flow with a condo. I have found that non-trivial HOA dues (like those on condos) really hurt a rental investment analysis. Anyone have success with condo rentals?
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