My home is officially cash flowing!

Member since 2022 · 13 posts · 10 votes

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Quote from @Tiana Lazard:

My tenants will cover the mortgage plus $300. Is that good?

Your definition of "cash flow" does not match what experienced investors teach or look for.

Cash flow is defined as the money left over after paying for all expenses, including setting aside a certain amount to cover projected expenses like maintenance, vacancies, or capital expenditures.

EXAMPLE:

Property Price: $250,000
Down Payment (25%): $62,500
Loan Amount: $187,500
Interest Rate: 6.5%
Loan Term: 30 years
Monthly Mortgage Payment: $1,185

Monthly Expenses

Mortgage Payment: $1,185
Property Taxes: $250
Insurance: $100
Maintenance (10% of rent): $250
Vacancy and CapEx (20% of rent): $500

Rental Income

Monthly Rent: $2,500
Total Expenses: $2,285

Cash Flow

Net Cash Flow: $215 per month 💰

However, there are many other factors to consider. Some invest strictly for cash flow. Some invest for appreciation. If your home is newer, requires little maintenance, and doesn't experience a vacancy for at least 12 months, your $300 cash flow can build up a tidy reserve to get you through. And as time goes by, rents will increase and your income will look better and better.

My first investment in 2004 made $35 more than the mortgage. Although I knew nothing about cash flow formulas, ROI, or anything else, I set that $35 aside every month. I owned that property for eight years and never had to put a dime into it out of my pocket. By the time I sold it, I was making $500/month more than the mortgage.

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Daniel HymanBusiness Member
CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
1y
Congratulations!
Make sure to plan for the added rental income/ordinary expenses on your tax return.
And make sure to plan for the additional depreciation as well!
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Patrick Roberts
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1y
Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Homestead exemption in LA is a tax break that homeowners get on their primary residence. It basically exempts the first $75k of value from the assessed value for the millage (among other things). If your exemption is already in place, it's unlikely you'll lose it unless there is some reason for the Assessor's office to look into your property. It's not super enforced in EBR in my experience.
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Michele FischerPro Member
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
1y
Congrats on that cash flow. I try to manage mine at $100/month/door. I know that the west coast has lower cash flow with the higher prices, but seems like you are in a good spot if you can maintain that average.
My state doesn't have state income taxes, what a blessing!
Keep receipts for all your expenses for federal taxes, keep the deposits in a seperate bank account. We like to keep all the rentals income in another account set aside to cover the big maintenance or expensive turnovers.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
1y
Quote from @Tiana Lazard:

My tenants will cover the mortgage plus $300. Is that good?
Your definition of "cash flow" does not match what experienced investors teach or look for.
Cash flow is defined as the money left over after paying for all expenses, including setting aside a certain amount to cover projected expenses like maintenance, vacancies, or capital expenditures.
EXAMPLE:
- Property Price: $250,000
- Down Payment (25%): $62,500
- Loan Amount: $187,500
- Interest Rate: 6.5%
- Loan Term: 30 years
- Monthly Mortgage Payment: $1,185
Monthly Expenses
- Mortgage Payment: $1,185
  Property Taxes: $250
  Insurance: $100
- Maintenance (10% of rent): $250
- Vacancy and CapEx (20% of rent): $500
Rental Income
- Monthly Rent: $2,500
- Total Expenses: $2,285
Cash Flow
- Net Cash Flow: $215 per month 💰
However, there are many other factors to consider. Some invest strictly for cash flow. Some invest for appreciation. If your home is newer, requires little maintenance, and doesn't experience a vacancy for at least 12 months, your $300 cash flow can build up a tidy reserve to get you through. And as time goes by, rents will increase and your income will look better and better.

My first investment in 2004 made $35 more than the mortgage. Although I knew nothing about cash flow formulas, ROI, or anything else, I set that $35 aside every month. I owned that property for eight years and never had to put a dime into it out of my pocket. By the time I sold it, I was making $500/month more than the mortgage.
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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
1y
Those seem very high estimates ^. My north side Chicago which is class A-/B+ units run on average sub 3% vacancies. Turnovers don’t even need paint most of time. I think it depends a lot on area and price point with $7k monthly rents I rarely spent more then $3-4k a year on cap/ex/maint. I self manage though and just use handmen for repairs.
1 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
1y
@Tiana Lazard very nice! I don't know about the homestead exemption you'd have to ask a CPA on here. My only tip is to stay on top of the market rents in your area. Real estate tends to go up and you don't want to be undercutting yourself over time.
1 Reply
Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
1y
@Tiana Lazard Congrats!!!!
1 Reply
Jeremy Horton
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
1y
Quote from @Patrick Roberts:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Homestead exemption in LA is a tax break that homeowners get on their primary residence. It basically exempts the first $75k of value from the assessed value for the millage (among other things). If your exemption is already in place, it's unlikely you'll lose it unless there is some reason for the Assessor's office to look into your property. It's not super enforced in EBR in my experience.

The homestead exemption is for your primary owner occupied residence. If you are renting the house out (not living there) you can not legally take a homestead exemption. Regardless, the OP said she was moving so she would take the homestead exemption on the house she moves into.

@Nathan Gesner summed up the cash flow scenario perfectly.
The $300 cashflow is a gross number though - you will invariably have expenses that will eat into this number. Generally speaking - repairs/maintenance (10%), CapEx (10%) and vacancy (5%). How will you plan to manage? Property manager is generally around 10% as well.
My thoughts - this is a GOOD start. You've started and will be able to learn by doing. If it was me, I'd go ahead and create an LLC w/ a bank account and all that. Talk with a CPA or read tax strategies (you may be able to save yourself some money). Worse case, you may break even or even lose a little the first year. Years 3-5 will likely start looking better though!

1 Reply
Patrick Roberts
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1y
Quote from @Jeremy Horton:

Quote from @Patrick Roberts:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Homestead exemption in LA is a tax break that homeowners get on their primary residence. It basically exempts the first $75k of value from the assessed value for the millage (among other things). If your exemption is already in place, it's unlikely you'll lose it unless there is some reason for the Assessor's office to look into your property. It's not super enforced in EBR in my experience.

The homestead exemption is for your primary owner occupied residence. If you are renting the house out (not living there) you can not legally take a homestead exemption. Regardless, the OP said she was moving so she would take the homestead exemption on the house she moves into.

@Nathan Gesner summed up the cash flow scenario perfectly.
The $300 cashflow is a gross number though - you will invariably have expenses that will eat into this number. Generally speaking - repairs/maintenance (10%), CapEx (10%) and vacancy (5%). How will you plan to manage? Property manager is generally around 10% as well.
My thoughts - this is a GOOD start. You've started and will be able to learn by doing. If it was me, I'd go ahead and create an LLC w/ a bank account and all that. Talk with a CPA or read tax strategies (you may be able to save yourself some money). Worse case, you may break even or even lose a little the first year. Years 3-5 will likely start looking better though!

Im aware that you cannot file or claim it on a non-primary property. Historically in EBR, though, once the exemption is in place, it is unlikely to be removed unless the property is reassessed, there is a complaint, or some other action occurs to bring non-owner occupancy to light, such as buying a new primary residence in the parish. The enforcement of this in EBR is lacking and lax - theyre not going out of their way looking for it like in SC. The OP said she intends to rent her new place, so until she files for a new homestead exemption, it is unlikely that the existing homestead will be revoked. Not that it cant or wont, but unlikely.
If OP applies for homestead on a new property, then I personally would not lie during the application about receiving the exemption on the existing property. Many people do, and they receive homestead on several properties at the same time. Im not advocating for this, but simply stating that it is the norm for whatever reason. My experience in EBR has been that you are unlikely to immediately lose your homestead exemption just because youre renting the property because EBR has very poor enforcement of this.
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Jeremy Horton
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
1y
@Patrick Roberts
That's a lot of words to say you're advocating tax fraud since there may be a low likelihood of getting caught...
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Patrick Roberts
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1y
Quote from @Jeremy Horton:

@Patrick Roberts
That's a lot of words to say you're advocating tax fraud since there may be a low likelihood of getting caught...

Im not advocating for anything, nor am I jumping to conclusions or making unfounded assumptions. Im saying that this is just the reality of how things work in EBR - theyre unlikely to immediately pull the exemption.
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Tiana Lazard
OP
Member since 2022 · 13 posts · 10 votes
1y
Thank you all for your responses! I am better for knowing what cash flow actually is, the rules on homestead exemptions in my area, etc. I'm very excited and I'm soaking in all of the knowledge you all have.
1 Reply
Ben FernandezBusiness Member
Realtor · Lancaster, PA · Member since 2025 · 169 posts · 97 votes
1y
That's awesome! Congratulations!

Be certain you've fully evaluated your cash flow by doing a cash flow analysis.

I leave it to you to confirm you've taken in consideration the following potential costs: CapEx, maintenance, property management, water, sewer, trash, vacancy, turnover, taxes, insurance, etc.
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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
1y
@Tiana Lazard Congrats on cash flowing! 🎉 A $300/month positive cash flow is a solid start, especially after house hacking. Since you're moving out, you’ll likely lose the homestead exemption, which may increase property taxes—check local rules. Now that it’s a rental, you can deduct mortgage interest, property taxes, insurance, repairs, maintenance, and depreciation to reduce taxable income, but depreciation will be recaptured at up to 25% if you sell. Ensure you have reserves for vacancies or repairs, properly screen tenants, switch to landlord insurance, and keep detailed records for tax time. Over time, you can increase rent, reinvest profits, or leverage equity to grow your portfolio. Great work—keep building!

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
1y
@Tiana Lazard check with your local municipality, but unlikely you can claim homestead unless it is still your legal address - and you want tenants getting your mail.
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Tiana Lazard
OP
Member since 2022 · 13 posts · 10 votes
1y
At the risk of sounding too dramatic (but I know us on BP can get extreme to reach our goals), I am going to NOT get another residence. I am going to sleep over at my bf's house at night and stay on campus or at a coffee shop or something during the day. No need to pay hundreds a month for an apt when I literally sleep over at his every night anyway. Next year he's planning on buying a house so we can officially live together, but I'm gonna grind this year and stack as much as possible without permanent housing.

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Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
1y
Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Hope it works out for you… $300 will not go very far after a repair or two. Of course maybe the area will appreciate so much that it will be a good deal for you still.
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Tiana Lazard
OP
Member since 2022 · 13 posts · 10 votes
1y
Quote from @Joe S.:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Where are you going to move and live for $300 a month?
So originally I was gonna do student living which is $475 a month. But I heard it's nasty and dirty and roach infested. Now I'm thinking of not having permanent housing at all. I spend every night at my bf's so I really would only need somewhere to go throughout the day. I can go on campus, my $100 storage unit, a coffee shop, etc.
0 Reply
Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
1y
Quote from @Tiana Lazard:

Quote from @Joe S.:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Where are you going to move and live for $300 a month?
So originally I was gonna do student living which is $475 a month. But I heard it's nasty and dirty and roach infested. Now I'm thinking of not having permanent housing at all. I spend every night at my bf's so I really would only need somewhere to go throughout the day. I can go on campus, my $100 storage unit, a coffee shop, etc.

How long have you been in college and what’s your major?
0 Reply
Tiana Lazard
OP
Member since 2022 · 13 posts · 10 votes
1y
Quote from @Joe S.:

Quote from @Tiana Lazard:

Quote from @Joe S.:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Where are you going to move and live for $300 a month?
So originally I was gonna do student living which is $475 a month. But I heard it's nasty and dirty and roach infested. Now I'm thinking of not having permanent housing at all. I spend every night at my bf's so I really would only need somewhere to go throughout the day. I can go on campus, my $100 storage unit, a coffee shop, etc.

How long have you been in college and what’s your major?

Many years at this point haha but I graduate with my masters in social work this May! Bought my house 2 years ago and this'll be my first time renting out the whole house instead of just a room.
1 Reply
Tiana Lazard
OP
Member since 2022 · 13 posts · 10 votes
1y
Y'all I read somewhere that you just have to live in your home for a certain amount of days out of the year for it to be your primary.
0 Reply
Patrick Roberts
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1y
Quote from @Tiana Lazard:

Quote from @Joe S.:

Quote from @Tiana Lazard:

Quote from @Joe S.:

Quote from @Tiana Lazard:

Ayeeee! Is $300 a month cash flow good? I've been house hacking for two years and for the first time I'm gonna be renting out the whole house and moving. My tenants will cover the mortgage plus $300. Is that good? I'm ecstatic! Any tips? Does this mean I can't claim a homestead exemption anymore? And what does that mean exactly??

Where are you going to move and live for $300 a month?
So originally I was gonna do student living which is $475 a month. But I heard it's nasty and dirty and roach infested. Now I'm thinking of not having permanent housing at all. I spend every night at my bf's so I really would only need somewhere to go throughout the day. I can go on campus, my $100 storage unit, a coffee shop, etc.

How long have you been in college and what’s your major?

Many years at this point haha but I graduate with my masters in social work this May! Bought my house 2 years ago and this'll be my first time renting out the whole house instead of just a room.

Are you at LSU?
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