What Is A Reasonable Cash Flow
What cash flows are the minimal that you accept when looking to purchase a rental property? In my case I can't take any negative cashflows in lieu of great appreciation...
any advice?
Paola
It's really up to you. If you have a property in a high appreciation area, it might be worth it to get 0 cashflow. Some people want $100 a month, some want $500. I guess really it's all about the area, the property, how much money you have out on it, and what kind of ROI you are looking for.
Your tolerance for risk, your other income, your financial reserves, your local real estate rental market, your temperment for landlording, your exit points all shape your options. What anyone else might do in the same position should not dictate what you should do.
Check out the other topics in this forum for other points of view on this question. Perhaps you should start here.
http://www.thecreativeinvestor.com/ViewTopic2195-24-16.html[ Edited by DaveT on Date 11/08/2003 ]
Just starting out? You need a positive cash flow first and foremost. That pays the bills and keeps you out of trouble.
How much? More is better than less? Rents have to be competive-but not rock bottom. Don't be a $50/mo landlord.
Here's an article that may give you some more ideas on cashflows
http://www.thecreativeinvestor.com/Article374.html&mode=&order=0&thold=0
Roger
Personally, I don't buy anything that costs more than 5 times the gross annual rent. This my seem extreme but actually I paid less than this for most of my properties. I do this by finding homes that need a lot of work so I build instant equity. I also would not consider any unit where my cashflow after every conceivable expense isn't at least 20% of the monthly rent.