11-06-2015, 06:12 PM
(11-06-2015, 04:23 PM)Owen Wrote: Ha! My point was more that you won't convince me that something that is cash flow negative on a monthly basis is a good investment. As a rule of thumb I make sure they are at least cash flow break-even (with a bit of a buffer to cover those unanticipated expenses.)
(11-06-2015, 04:29 PM)MidTowner Wrote: There's risk, but you have to purchase a property with a reasonable expectation of positive cash flow. To do otherwise necessarily means you're speculating that there will be capital appreciation...maybe that's not bad in some cases, but it's not quite the same as investing in rental property. Owen is talking about people who buy condos for "investment" with the expectation that they will be out of pocket every month. They're subsidizing their tenants.
After you've paid out the mortgage, you own the property outright. Even if your rents didn't cover the full costs along the way, and even if there's zero capital appreciation, it seems to me that this can still be a financially reasonable thing to do. Or am I missing something?