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Michael Ashe
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Renting out my primary residence and buying a new primary

Michael Ashe
Posted Feb 19 2024, 16:27

Back again but with a little more info. I want to get started in real. Estate investment, what's my current primary residence in Knoxville, TN. I've done the math roughly and honestly the cashflow is coming out much less than I'd hoped for by a long shot.

Based on similar homes here's where I'm at. $2,500-$2,700 in rent but have a $1,900 mortgage (including current property taxes) plus $100 for insurance, plus a 10% chance of no one renting and another 10% set aside for repairs.

After all that I'm in a range of breaking even or making $200 a month with this as a rental. My question is at what point is it not worth it to use this as a rental? Am I here already or have I made a mistake in my numbers assuming everything I layed out here is correct.

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Cory King
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  • Real Estate Agent
  • Knoxville, TN
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Cory King
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  • Real Estate Agent
  • Knoxville, TN
Replied Feb 26 2024, 09:18
Quote from @Michael Ashe:

Back again but with a little more info. I want to get started in real. Estate investment, what's my current primary residence in Knoxville, TN. I've done the math roughly and honestly the cashflow is coming out much less than I'd hoped for by a long shot.

Based on similar homes here's where I'm at. $2,500-$2,700 in rent but have a $1,900 mortgage (including current property taxes) plus $100 for insurance, plus a 10% chance of no one renting and another 10% set aside for repairs.

After all that I'm in a range of breaking even or making $200 a month with this as a rental. My question is at what point is it not worth it to use this as a rental? Am I here already or have I made a mistake in my numbers assuming everything I layed out here is correct.


Depends on your circumstances and goals. House hacking for a bit of added cash flow without moving?

Based on that math yes, you'd clear a couple hundred dollars after all debts and expenses, not the worst spot to be if you're not necessarily needing the cashflow/trying to live off of it, but instead are focusing on playing the long game. 

Knoxville has a lot of runway for growth and by picking up 1 each year or 2 is a solid long term play. 

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Corby Goade
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  • Investor
  • Boise, ID
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Corby Goade
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  • Boise, ID
Replied Feb 26 2024, 09:40
Quote from @Michael Ashe:

Back again but with a little more info. I want to get started in real. Estate investment, what's my current primary residence in Knoxville, TN. I've done the math roughly and honestly the cashflow is coming out much less than I'd hoped for by a long shot.

Based on similar homes here's where I'm at. $2,500-$2,700 in rent but have a $1,900 mortgage (including current property taxes) plus $100 for insurance, plus a 10% chance of no one renting and another 10% set aside for repairs.

After all that I'm in a range of breaking even or making $200 a month with this as a rental. My question is at what point is it not worth it to use this as a rental? Am I here already or have I made a mistake in my numbers assuming everything I layed out here is correct.


Personally, I'd do a deal like this any day. You have to keep in mind that there will be tax benefits and appreciation in addition to your cash flow. If you find better ROI, the chances of appreciation, which is where real wealth and freedom happen, is very low.

Also- you should be providing a product that outperforms the rest of the market. If your market is 10% vacancy, you should be under 5% by providing a better product and attracting better tenants. 

Best of luck!

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James Carlson
  • Real Estate Agent
  • Denver CO | Colorado Springs, CO
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James Carlson
  • Real Estate Agent
  • Denver CO | Colorado Springs, CO
Replied Feb 26 2024, 15:57

@Michael Ashe

Your numbers sound pretty solid.

I think this site is great, but sometimes it sells a story that ain't there, mainly that you should be killing the cash flow game or it ain't worth it. 

At least here in Denver and Colorado Springs, where annual appreciation over the last 40 years has averaged 4-6% even with some major housing recessions, appreciation is where you make your most money. Cash flow is just icing. (I think some people would disagree with those line of thinking.)

If you have the capital to buy again, do it and keep the property you have as a rental. If you're aching to squeeze out a few more dollars, you could look at furnishing it and renting as a medium term rental, but to me, you're on the right path. It's not quite as fast as some podcast guests would have you believe, but you're doing well.

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Michael Ashe
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Michael Ashe
Replied Feb 27 2024, 07:44

James I appreciate this. Not only because it supports my current decision to go forward with rental but because this is kind of my vision for starting out in Real Estate. I've come to understand in the past few years that with my current skills there is somewhat of a cap on my earning potential. However I want to provide my partner and family a certain lifestyle and build for the future with real estate. 

So this path is the most realistic for me personally. Save up 5% down and rent out the old property with #s that look similar to this. Its much more achievable than 20% on an investment property. and I play the long game and rely on the equity I build versus living by the cash flow. Of course I want to earn profit month to month but long term is where my mind is at. Thanks for the input man.

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Michael Ashe
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Michael Ashe
Replied Feb 27 2024, 08:00
Quote from @Cory King:
Quote from @Michael Ashe:

Back again but with a little more info. I want to get started in real. Estate investment, what's my current primary residence in Knoxville, TN. I've done the math roughly and honestly the cashflow is coming out much less than I'd hoped for by a long shot.

Based on similar homes here's where I'm at. $2,500-$2,700 in rent but have a $1,900 mortgage (including current property taxes) plus $100 for insurance, plus a 10% chance of no one renting and another 10% set aside for repairs.

After all that I'm in a range of breaking even or making $200 a month with this as a rental. My question is at what point is it not worth it to use this as a rental? Am I here already or have I made a mistake in my numbers assuming everything I layed out here is correct.


Depends on your circumstances and goals. House hacking for a bit of added cash flow without moving?

Based on that math yes, you'd clear a couple hundred dollars after all debts and expenses, not the worst spot to be if you're not necessarily needing the cashflow/trying to live off of it, but instead are focusing on playing the long game. 

Knoxville has a lot of runway for growth and by picking up 1 each year or 2 is a solid long term play. 


 I would absolutely entertain the house hacking idea if not for my wife 2 children. We don't have a space in the home that could serve as an extra space to rent out. 

I feel the same way about Knoxville, as much as I've seen it grow in the last 5-10 Years I think that building here in my home town will turn out to he a great decision.

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Dan Beaulieu
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  • Knoxville, Tennessee (TN)
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Dan Beaulieu
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  • Lender
  • Knoxville, Tennessee (TN)
Replied Feb 27 2024, 13:03

Cash flow will be close to 0 for a few years, but there are still 3 other ways that you're building wealth through keeping it! Cash flow is a funny game. One big repair and 3 years worth of cash flow can be totally erased. But your tax benefits, Debt pay down, and appreciation will still be there :)