Single Family Rentals

[Eric Stanley]

I have been looking at single family homes to purchase and then rent. I have learned that it is difficult to make these cashflow due to the high prices in the area and seeming booming real estate market (in our area). Is it normal to have a negative cashflow for single family homes, in hopes that it will over time appreciate in value?

[Dave Toelkes]

It may be typical for your area, but, I would not call this normal from a responsible investment point of view.  You want to buy rental property that has a positive cash flow. There are some folks with very high incomes that use the negative cash flow property as a tax reduction technique, but only because they can afford to carry a negative cash flow property while they wait for appreciation to get them out of the hole they are digging.