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2
Posted on 2/16/17 at 10:21 am to MLSter
I would suggest any excess cash flow, you put in a savings account, and not touch it. It's a long term play. Let that sucker grow...
That'll cover any expenses (cap ex, or otherwise), vacancy, etc..
I have a separate account for my investment properties. Rent goes in, mortgage goes out. Period... I don't touch it unless i'm short on fun money one month. Then i'll pay it back. Once I get to "my number", i'll start to enjoy the cash flow.
Even if you only make $100 cash flow, that's better than a lot of areas in the country. Personally, I wouldn't touch a property that is just "breaking even". But again, the thought process is you HOPE that the property appreciates, and you can also raise rents in a couple years (or annually). All the while, they're paying off your house for you, and you're crushing it in tax benefits (which we haven't discussed yet).
Some areas of the county actually have NEGATIVE cash flows (Austin, Denver, San Fran). The thought here is you're banking on appreciation and dept paydown.
That'll cover any expenses (cap ex, or otherwise), vacancy, etc..
I have a separate account for my investment properties. Rent goes in, mortgage goes out. Period... I don't touch it unless i'm short on fun money one month. Then i'll pay it back. Once I get to "my number", i'll start to enjoy the cash flow.
Even if you only make $100 cash flow, that's better than a lot of areas in the country. Personally, I wouldn't touch a property that is just "breaking even". But again, the thought process is you HOPE that the property appreciates, and you can also raise rents in a couple years (or annually). All the while, they're paying off your house for you, and you're crushing it in tax benefits (which we haven't discussed yet).
Some areas of the county actually have NEGATIVE cash flows (Austin, Denver, San Fran). The thought here is you're banking on appreciation and dept paydown.
Posted on 2/16/17 at 12:11 pm to MLSter
Sounds like you are having to use a lot of people for a marginal profit, if any. What is your repayment schedule for your dad? What is his ROI? Also what are you paying you management people? If your not I can guarantee you they will be lying to you about "visiting" the property. As another poster mentioned, for what you are going to pay for the house and what you can rent it for you will not be making much money. Whos covering the utilities, property tax and also you are renting to women so I doubt they are doing any maintenance or lawn care. When something breaks and you are not instate to fix it, you will be covering that cost as well. Keep in mind these are old houses so something is always going to be wrong with it. Please read up a lot more before you decide this is a good idea and factor in how much you are relying on other people. Your sister is not obligated to live there and neither are her friends, so if it becomes vacant can you cover the extra mortgage for a few months?
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