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Is Owning a Rental Property a Good Idea … Even with Negative Cash Flow?

NEW UPDATE: We already stated that owning a rental home is a great investment. 20% return after taxes is possible with with professional property management and all expenses covered.

But what if the numbers get really bad? is it still a good investment?

Hint: Call Real Property Management Rio Grande… 505-225-2812.   https://www.rpmriogrande.com for the answer

Simple math hypothetical example (all numbers for example only):

165,000 home in Albuquerque

30000 down payment

monthly payment on 30 year mortgage at 5.5% (not a good mortgage today) 

$200 taxes and insurance

Rent is 1150. BUT we’ll add 10% vacancy to make it worse

Property Management Fees are 115 per month.

expenses for the property (repairs, maintenance) are 1700 per year… but lets add 50% to that and make it $2500 per year. 

We’ll say the rent only goes up 1% per year vs 3% planned

We’ll say Values only go up 2% per year vs 3-5% planned

your cash flow is now  -250 to -300 per month… tough to handle I know.

But your ROI on the initial 30000 is still 4000-4500 per year after taxes.

>10% return with very bad numbers, vacancy, overly high expenses, etc. Not too bad

more details on returns

Investment Property Calculator

Note: if you don’t use professional management, you wont get the rent, appreciation, or protection of your investment that you deserve!

Mark

Real Property Management Rio Grande

www.rpmriogrande.com

505-292-4765

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.