What is wrong with this picture?
Here is a quote from a seller trying to convince me that their property will have positive cash flow:
This is both pitiful and insulting. I'm not sure if they don't know what they are doing or they think I am a fool.
In reality, $975/month rent would certainly not produce a positive monthly income. There are many expenses to owning rental property: Maintenance, Property Management, Insurance, Home Owner's Association, Property Taxes.
It isn't necessarily bad to have a negative cash flow, but simply subtracting the mortgage from the rent is a faulty income analysis.
...with 25k down and with me financing the remaining balance of 119k @ 6% interest, the payment would be $713.47 every month. You would be recieving rent of $975 every month. So there would actually be a positive cash flow for you.
This is both pitiful and insulting. I'm not sure if they don't know what they are doing or they think I am a fool.
In reality, $975/month rent would certainly not produce a positive monthly income. There are many expenses to owning rental property: Maintenance, Property Management, Insurance, Home Owner's Association, Property Taxes.It isn't necessarily bad to have a negative cash flow, but simply subtracting the mortgage from the rent is a faulty income analysis.
posted by Vijay Swamidass at
10:28 AM
1 Comments:
Yes, quite insulting. The seller also seems content to mooch off you to the tune of $595/mo interest (at least initially). Then again, perhaps "recieving" (sic) rent is somehow better than "receiving" it.
By
Leeton Lawdoc, At
9:28 PM
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