Thread: Money Investing megathread extravaganza
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Old 04-19-2017, 06:56 PM   #903
scho63 scho63 is offline
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Join Date: Feb 2009
Location: Scottsdale, AZ
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Quote:
Originally Posted by Hog Farmer View Post
Rentals can be tough if you only have 1 or 2 and the reason is they normally don't generate enough cash flow. A hot water heater replacement can cost you $1000 and if you're clearing $50 /month on a rental after Principal/Interest/Taxes and Insurance well then two rentals will pay for that one water heater in a year. My break seemed to have come at 10 rentals to cover itself without having to pull money out of my pocket. but keep in mind I was at 100% financing too.
You answered an important question here for someone thinking about getting into the rental home game, I think Buehler for tax reasons.

You NEVER want to buy a rental for tax reasons, you want to buy it to make money and positive cash flow even if it's $25 a month. Taking money out of your pocket every month to pay for someone else to live in your home is ludicrous.

Great summary!
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