Can't find cashflow

11 Replies

Hey everyone!

I'm moving in a few months and I'm trying to find a place that makes sense to rent after I relocate again in about 3-4 years. I'd live in it for that time, then rent when I leave. However, everything on the market is negative cashflow unless I put somewhere around 50% down which isn't feasible right now. I'm looking at northern Virginia (NOVA) specifically Fairfax County and/or Alexandria and 3/2s are about $450k and rent for #2200 leaving a negative cashflow of -$400 to -$600.

Any suggestions? Is there a house-hacking technique or finance strategy I'm missing? I'd like to not throw away $100k in rent over 3-4 years but it's tough convincing myself that paying to hold onto the property makes sense. 

Thanks!

Steve

Not every market is going to net you a positive cash flow if you're using the 50% rule. That's just the way it is! That rent seems like it would barely even cover the mortgage!

I purchased an SFH to live in as my primary (3 bed, 3 bath) for $450k in 2012. I decided to rent out the 2 spare rooms for a total of $1550 and live in the master bedroom. I invest out of state for my cash flow. The extra funds I'm getting from the room rentals has definitely helped me save money :)

Originally posted by @Steven Kleppin :

Hey everyone!

I'm moving in a few months and I'm trying to find a place that makes sense to rent after I relocate again in about 3-4 years. I'd live in it for that time, then rent when I leave. However, everything on the market is negative cashflow unless I put somewhere around 50% down which isn't feasible right now. I'm looking at northern Virginia (NOVA) specifically Fairfax County and/or Alexandria and 3/2s are about $450k and rent for #2200 leaving a negative cashflow of -$400 to -$600.

Any suggestions? Is there a house-hacking technique or finance strategy I'm missing? I'd like to not throw away $100k in rent over 3-4 years but it's tough convincing myself that paying to hold onto the property makes sense. 

Thanks!

Steve

Hi Steve,

Look into the Midwest.

I am sure you will find a ton here :)

Ohio, Michigan, Indiana

Thanks and have a great day.

Try looking in 22151 near the 95 corridor.  I think your chances are best in the Southern part of Fairfax near PW county, but even there you'll need to find a good deal.

@Steven Kleppin

This is why I continue to invest out of state. We live in Arlington and are keeping our eyes open for a deal that will work but haven't found one yet. The only examples I've found that will get you to positive Cashflow are if you buy a property with a basement apartment or buy a fixer upper and do a live in flip. There unfortunately aren't many (any) duplexes in this area. Another option is to rent out rooms like someone else recommended. You can do this with a commuter that only stays locally during the week or through airbnb if you buy in the city. Hope that helps and let me know if you find anything!

Thanks everyone for the advice. I'll have to keep looking. Maybe a rentable basement to save up while I'm there. 

@Jacob Elbe Where are you investing at? Something pretty drivable like Baltimore?

@Steven Kleppin

I'm buying mostly in the Midwest, we actually have one we bought from @Engelo Rumora !  I started investing while we were stationed overseas, so I figured it didn't matter where I invested since it would be sight unseen and at a  distance anyways!  And no matter where I buy now, the military could move me somewhere across the globe in a couple of years again.  So we continue to invest where it makes the most sense for us.  Right now we look for strong cash flow.  Our current properties are in the Cleveland, Indianapolis, and Toledo markets.  We're looking at options in Richmond, but haven't made any offers in that area yet.  In the mean time we are still happy with the deals we're seeing in those markets.  

Let me know if you ever want to grab a coffee!

Hey Steven. Unfortunately cash flow properties are nearly nonexistent in the current Metro DC market. You have to go pretty far out like Woodbridge, VA or Waldorf, MD. I would also explore Prince George's County ie....Hyattsville, Mount Ranier, Beltsville, Greenbelt and College Park. They had a ton of foreclosures and are still recovering. Good luck.

Originally posted by @Tarik Larue :

I would also explore Prince George's County ie....

@Steven I would do a significant amount of homework on PG County before you sink any money into that area.

With that said -- consider forgoing cash flow and look to where the metro lines are being developed out towards Reston.  With that said, I agree with @Tarik in that cash flow is unlikely in the area from what I have also seen. 

Originally posted by @Jacob Elbe :

@Steven Kleppin

I'm buying mostly in the Midwest, we actually have one we bought from @Engelo Rumora!  I started investing while we were stationed overseas, so I figured it didn't matter where I invested since it would be sight unseen and at a  distance anyways!  And no matter where I buy now, the military could move me somewhere across the globe in a couple of years again.  So we continue to invest where it makes the most sense for us.  Right now we look for strong cash flow.  Our current properties are in the Cleveland, Indianapolis, and Toledo markets.  We're looking at options in Richmond, but haven't made any offers in that area yet.  In the mean time we are still happy with the deals we're seeing in those markets.  

Let me know if you ever want to grab a coffee!

Thanks for the mention mate ;)

@Steven Kleppin

I forgot to mention that another reason I've stayed out of DC and MD is that they are both very tenant friendly. There are a number of blog posts and forums that go into more detail on this. I prefer to invest in an area where I (or my property manager) can easily evict a tenant if they stop paying rent and where I don't have to worry about issues like lead inspections and other local requirements that eat into my bottom line. 

Originally posted by @Michael Roy :
Originally posted by @Tarik Larue:

I would also explore Prince George's County ie....

@Steven I would do a significant amount of homework on PG County before you sink any money into that area.

With that said -- consider forgoing cash flow and look to where the metro lines are being developed out towards Reston.  With that said, I agree with @Tarik in that cash flow is unlikely in the area from what I have also seen. 

Reston does have condos under 200K.  However the things to watch with them is the condo fees which can be 500/month or even higher.

Rents look pretty high - most apartments/condos seem to start around 1500 and townhouses are generally over 2000.  

There does seem to be a lot of apartment inventory that is recently completed or being built.  I am not sure what the effect will be on the rental market - it will probably make higher end condos harder to rent as an individual landlord - but I could see it playing out either way for townhouses or cheaper condos.

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