Long term rentals

[Adrian Martinez]

Hello fellow bigger pockets members!! 

I wanted to gather some information on investers doing long term rentals in the houston area. 

When looking at long term rentals especially in the market now. What are your thoughts on negative cash flow and letting equity build up for long term rentals? Do turn key cash flowing properties exist? 

Looking for discussions and opinions. Thank you all. 

[Alexander Graff]

Honestly, in today’s market I think a lot of investors are dealing with this exact question. With rates still around 6%, refinancing really only makes sense for people who bought at 7%+ interest. The investors who locked in properties at 2–3% rates when things were great are in a very different position than buyers today.

From the property management side, working with a lot of investors here in Houston, I’m seeing plenty of owners either barely breaking even or even taking small monthly losses right now. In a lot of cases, the best strategy is simply to rent the property out, let a tenant help pay down the mortgage, wait for appreciation over time, and hopefully refinance later when rates improve and let rents go up.

That said, the worst thing you can do is let a property sit vacant while waiting for the “perfect” market conditions. Vacancy usually hurts more than people realize once you factor in mortgage, utilities, maintenance, and turnover costs.

True turnkey cash flowing deals still exist, but they’re much harder to find and the numbers need to be analyzed very carefully. A lot of deals look good on paper until real-world expenses show up.

Happy to help however I can if you’re looking at properties. I’d be glad to offer a rental analysis, market insight, or just a second opinion on a deal.