I want to know how many rental properties i should be looking at before i find a positive cash flowing property. Ive looked at about ten now and have only calculated negative cash flows. basically im just trying to figure out if im over estimating expenses or just haven't looked at enough properties.
It doesn't work like that. Your asking the wrong question. What you should be asking is, "how many non cash flowing properties do you analyze, before you move on to a different market"?
It doesn't work like that. Your asking the wrong question. What you should be asking is, "how many non cash flowing properties do you analyze, before you move on to a different market"?
Analyzing cash flow of a rental property is a complex process. Even the properties providing negative cash flow can provide you a good profit. Some of the factors included are:
Depreciation, Income Tax benefits by lowering your income bracket, inflation to provide equity in your rental property and rise of selling price when it is sold, capital gains/losses when you sell your rental property, etc.
In addition, in order to use a real property as a rental, it is desirable to have it in the rental market for a long term.