Negative cashflow on Rental Property .

260 Replies

@Vinh Huynh Hey, since everyone is telling you what to do with your property. I thought I might join the fun.

Here's a couple of Value Add Opportunities right in line with what others have mentioned so far.

I was thinking, maybe you could turn the attic into a Airbnb rental. 

Then take one of those rooms and convert it into a 6 Bed Hostel (Combination on the Bathroom, ofc.) 

Finish that crawl space and rent it out to little people. 

While you're at it, why not do a built in snack machine for your 420 friendly tenants? 

If you really want to maximize your ROI, go ahead and list that garage as "Move-In" ready!

I'm joking! In all seriousness, I wish you the best of luck!

@Vinh Huynh

This won’t get you to cash flow break even, but what about management costs?

I have a friend who owns a home in SoCal that he literally just breaks even on. He lays 7% for property management. 10% in expensive markets seems absurd to me. So if you’re paying that much, see if you can shop it around or negotiate with your current manager.

We have been self-managing our four units in San Diego for about three years using Tenant Cloud. We bullet-proofed our places before we rented them out, and hardly ever have to fix anything. When we do, we call professionals to fix (water heater went out, had it replaced, stuff like that.). We vet our own tenants personally, because of bad choices property managers have made in the past. Turnover is a pain in the ***, but there are companies that will place tenants for you and manage the move out if you need help with that. 

Tenant Cloud are Cozy are two online systems that are free and make it easy for us. By the way, we are in Mexico currently, and three months ago, we were in SE Asia! 

I would self-manage and if you feel like you need to, you can always hire a property manager again. There's plenty around; they like the 10% they earn on houses in Cali. Seems like you'd only need the PM when you have a tenant move out our have an issue with one, if even then.

@Vinh Huynh Are you renting to one family or one individual? What if you rented it out to roommates? Young professionals who are already friends. Perhaps you could get a little more out of each of them. Please note I would definitely NOT recommend renting rooms out to people who don't know each other as that is doing for all kinds of trouble. An idea from a newbie for what it's worth.

@Vinh Huynh do not put much value on others opinion that do no know your market, including myself. Consult other investors in your own market. It makes me laugh when someone in more traditionally “cashflow” states tells someone in CA that they wouldn’t buy anything without “x” amount of cashflow. Audit your own reasons for why you purchased the property, your goals, etc. all markets are different and should be treated as such, along with all other personal factors.

Its not always about trying to maximize cashflow, ROE, etc. everyone has different goals and reasons. Some in SoCal would prefer to have 2-3 homes paid off by the time they retire, than count on a 401k that may never be enough to pay oneself what rent from those properties can pay in perpetuity.

Also, when retiring during a recession, some would rather lose half the value in their homes and still collect rent than half the value of 401k.

Best of luck whatever you decide.

@Vinh Huynh I don't have an opinion on whether you should keep or sell, but here are a couple points to consider based on my experience purchasing my first property last summer.

1. What interest rate do you have on your rental? Rates are lower than last summer so you may be able to shave off half to 2/3rds or your negative cash flow by refinancing.

2. Are your tenants paying for Water and Garbage? If not, you can make changes to the lease once it comes time time to renew with the existing tenants or start fresh when you bring in new tenants.

Best of luck!

@Vinh Huynh Although I am not a fan of negative cash flow but I guess CA market is a bit of exception. However, even with CA market, I want to be at least breakeven after accounting for depreciation and other tax write-offs. Remember, appreciation should only be accounted as a bonus and should never be part of your cash flow spreadsheet

I purchased a rental property in SoCal that didn't cash flow from day 1. It was a few hundred dollars in the red each month. Because I couldn't see the benefit right away, it was stressing me out (now I'd like to think I have some more perspective on the long game). When rates went down, I refinanced it at a lower rate and turned it cash flow positive. Since then, I have been able to raise the rent in line with the market competition. The property is in a nice neighborhood, near good schools and attracts quality tenants. It sounds like you have done your research on this for your property also. As a full time W-2 income earner, getting good quality tenants and having a competitive listing have really helped with peace of mind on this long term investment. The value of the property has appreciated more than enough to cover a hypothetical monthly expense shortfall of a few hundred $$$'s already, even over 30 years. If this is a retirement play for you, why not hang on to it and see what happens 10 years down the road? If you have a secure job and can cover the shortfall or emergency expenses in the short-term, you continue to stay in the game. Despite no cash flow from day 1, you have a nice combination of the tenant paying down your mortgage and the opportunity for appreciation. Also I'd echo other comments that if you end up buying another rental property, you can use the loss on this property to offset another one.

Ideas to increase cash flow

-Lower any monthly management expenses possible

-Watch the interest rates and refinance at a lower rate to lower your mortgage expense. Make a calldown list of lenders who may be hungry for the business and see if you can get a better rate than what you have with a cheap enough transaction cost to make the refi pay off quickly.

-Look at rental listings in your area, see what's renting for the target you want to hit and figure out if there's ROI to offer that amenity. Ex: Nicer landscaping/curb appeal? Is it a patio with a grill? Pet friendly? etc.

-Does it have a detached garage? If so, you can look into converting it into an ADU studio unit and rent that out separately. California has many cities looking to expand the housing inventory, allowing you to shortcut permits to create an additional housing unit.

@Vinh Huynh , How would you describe your property and area it is in? If it is a B or A class property, think outside the box on creating cash flow.

For example, instead of renting your property to a long-term tenant, consider renting it out to short-term business travelers via AirB&B (travel nurses or a layover alternative to a hotel for a small trucking company) Or you could rent it by the room to three or four long-term tenants providing them with their own bedroom but shared furnished common areas. There's an upstart company called Copious, which is doing just that and managing it for the landlord. Another option is being a landlord and contracting with the US government seeking housing for military transfers which are given housing allowances that also include paying for all the rental's utilities. You can provide housing for victims of disaster. Insurance companies will often pay 30 to 40 percent more than typical rental rates for their clients who are in need of a short-term stay because they lost their homes to a fire, for example.

 Oh and since you're a California landlord, I wouldn't bank on raising rents to create cash flow because there is a string of legislative bills now up for review that seek to cap rents and put restrictions on how and when landlords can do rent increases. 

I hope this was helpful to you. Best of luck!

@Johann Jells

Maybe it’s just me. But the more you explain your reasoning, the more I know I would not have bought this property at that price. There is a difference between a value added property, But Vinh’s property is not a value added situation. Vinh is actually waiting for outside circumstances to correct his cash flow problem. He went into it with the wrong number to purchase. Let’s face it, he paid too much that it won’t cash flow. He fell in love with the Property. He probably should’ve fell in love with the right numbers to purchase it.

Thanks for sharing though,

This was valuable for me.

I got two like that too want another?

A little negative cash flow might be ok if you can handle it and you are hoping for a bigger upside in appreciation and once you have it a couple of years the exit tax bite is mitigated.

But losing $300+ per month with $125k down does not make sense at all. Where will it be in a year with 3% upside. It ties up your capital for other deals that might be a better deal. 

Look at your exit strategy, no investor will buy that so your only market is retail buyer. 

$500k might be cheap in OC compared to RC but the IE those areas turn first and values start declining there first.

Take stock, what is your long term goals build up properties for cashflow or equity, can you live there?

I would hedge my bet and if you can sell after 1 year before the market flattens or worse goes down or I would figure out how to manage long term and hope the market continues to go up. Its really a 50/50 no one really knows where the market is going. 

On one side we have high demand, low interest rates, good job growth etc. The other side we have increasing inventory, changing buyer sentiment, affordabilty is pushing buyers and renters to the max. 

Im in the same boat and here is what I am doing

So after a year fix it up, stage it and sell to retail buyer, try again. There will always be great deals you can buy at retail prices.

@Vinh Huynh

1-Drop the property managment service immediately.

2- Sell the property and get out of a sinking ship

3- Try your hardest to sell it as a FSBO. A realtors 6% fee will be very damaging to your overall net loss.

4- Use the Bigger Pockets calculator before your next deal.

Math is math. 1 + 1 = 2 no matter how creative you get. Right now you are in the negative and there aren’t enough tricks to get you imaginary numbers and put you in a positive cash flow.

Best wishes sir.

@Vinh Huynh ID TAKE THE NEGATIVE CASHFLOW FOR 7% INCREASE IN VALUE EACH YEAR- SELL IT AT YR TEN! $$$$

$300 A MONTH IS NOT GOING TO CHANGE YOUR LIFE—- A COUPLE HUNDRED THOUSAND IN 10 YRS WILL.

YOU CAN BEG FOR $300 IN AN AFTERNOON ON A STREET CORNER TO COVER UP THE EXPENSE.

Originally posted by @Account Closed :

@Vinh Huynh ID TAKE THE NEGATIVE CASHFLOW FOR 7% INCREASE IN VALUE EACH YEAR- SELL IT AT YR TEN! $$$$

$300 A MONTH IS NOT GOING TO CHANGE YOUR LIFE—- A COUPLE HUNDRED THOUSAND IN 10 YRS WILL.

YOU CAN BEG FOR $300 IN AN AFTERNOON ON A STREET CORNER TO COVER UP THE EXPENSE.

 7% per year in appreciation is aggressive, we are out of that market.

$300 in an afternoon, really then we all should be doing that! 

Originally posted by @Matt R. :
Originally posted by @Joe Villeneuve:
Originally posted by @John Hickey:
Originally posted by @Joe Villeneuve:

@Bill Brandt  

Here's an example comparison over the first 5 years:

A) $400k property; 20% DP; $2400/yr negative cash flow, 15% avg Apprec/yr-

1 - Appreciated value = $805k
2 - Appreciated return = $405k
3 - Total cash flow = -$12,000
4 - Down Payment = $80k
5 - Accumulated negative = $92,000
6 - Accumulated Positive = $405,000
7 - Net Gain = $313,000

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr -

1 - Appreciated value = $146
2 - Appreciated return = $46k
3 - Total cash flow = -$36,000
4 - Down Payment = $20k
5 - Accumulated negative = $20,000
6 - Accumulated Positive = $82,000
7 - Net Gain = $62,000

Now, before you can say:

1 - You can raise rents...so can I
2 - As I raise the rents, I will reach positive CF...except taxes and insurance also are going up. A negative CF property quite often is like stairs going down hill. No matter how many steps you add, the hill keeps going down too.

...and, the big one.

I have $7200/year I can invest into another CF property. If I get a total of $36,000 in CF over that 5 year period, I can invest it in at least 1 more of the same property...and in year 6 I can buy a 3rd. That means while you have one property gaining in equity, and most likely still negative in cash flow, I have 3 properties...all gaining in cash flow...AND equity.

Another issue is starting point...as in "how much money are we starting with"?  Assuming the comparison is based on the same person, the same starting point for both options, that being $80k in cash, the B) option allows for the purchase of 4 of the same properties.

So the revised B), using the same $80k starting point, is as follows:

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr - x 4

1 - Appreciated value = $146 x 4 = $584k
2 - Appreciated gain = $46k x 4 = $184k
3 - Total cash flow = -$36,000 x 4 = $144k
4 - Down Payment = $20k  x 4 = $80k
5 - Accumulated negative = $20,000 x 4 = $80k
6 - Accumulated Positive = $82,000 x 4 = $328k
7 - Net Gain = $62,000  x 4 = $248k

I have $36,000/year I can invest into another 4 CF properties. If I get a total of $144,000 in CF over that 5 year period, I can invest it in at least 4 more of the same property...and in year 6 I can buy a 3rd set of 4. That means while you would have one property gaining in equity, and most likely still negative in cash flow, I have 12 properties...all gaining in cash flow...AND equity.

The more you talk the more it reminds me of that peanut route.  

Your saying this guy should sell his one investment property in a great market to take a haircut on fees, closing etc.  

Then he should start building a portfolio of smaller, cheaper cash flowing properties most likely far from his house....12 of them! 

How many flights to the Midwest, days away from family is that?

How many LLCs should he open.....he'll be on a first name basis with his lawyer. Accountant will need him to send all kinds of signatures....be filing taxes in new state. Register his LLC with the state Dept of that state depending on where.

 His taxes will be a phone book. Maybe he can use old returns in his fax/copy/scanner.   The amount of paperwork he’ll be signing  a year he’ll need plenty of scrap. 

Better buy a good scanner printer. You’ll be printing and signing a ton   

Not too mention maintenance and expenses.  Most markets Maintenace expenses are 50%.  Probably not so after a few years in Cali   

 In 25 years he’ll replace 36 hot water heaters instead of 3. 

12-24 roofs, countless fridges, stoves, toilets  

No doubt he'll need a managing agent. Have to watch them.

Commercial mortgages hello. 

Commercial insurance as well.  

Sounds like a job. 

The guy wants an investment property, he’s got a job.   

 Can you spell P...r...o...p...e...r...t...y  m...a...n...a...g...e...r...?

 Can you spell 13.8% national average PM fees after the ups and extras? Joking as come back, but it is actual. 

 That's the average. That's not the number for all PM's.  I've never paid more than 10%...and with volume 8%. What's the actual for the property in question?

Originally posted by @Account Closed :
Originally posted by @Joe Villeneuve:
Originally posted by Account Closed:
Originally posted by @Joe Villeneuve:

@Bill Brandt  

Here's an example comparison over the first 5 years:

A) $400k property; 20% DP; $2400/yr negative cash flow, 15% avg Apprec/yr-

1 - Appreciated value = $805k
2 - Appreciated return = $405k
3 - Total cash flow = -$12,000
4 - Down Payment = $80k
5 - Accumulated negative = $92,000
6 - Accumulated Positive = $405,000
7 - Net Gain = $313,000

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr -

1 - Appreciated value = $146
2 - Appreciated return = $46k
3 - Total cash flow = -$36,000
4 - Down Payment = $20k
5 - Accumulated negative = $20,000
6 - Accumulated Positive = $82,000
7 - Net Gain = $62,000

Now, before you can say:

1 - You can raise rents...so can I
2 - As I raise the rents, I will reach positive CF...except taxes and insurance also are going up. A negative CF property quite often is like stairs going down hill. No matter how many steps you add, the hill keeps going down too.

...and, the big one.

I have $7200/year I can invest into another CF property. If I get a total of $36,000 in CF over that 5 year period, I can invest it in at least 1 more of the same property...and in year 6 I can buy a 3rd. That means while you have one property gaining in equity, and most likely still negative in cash flow, I have 3 properties...all gaining in cash flow...AND equity.

Another issue is starting point...as in "how much money are we starting with"?  Assuming the comparison is based on the same person, the same starting point for both options, that being $80k in cash, the B) option allows for the purchase of 4 of the same properties.

So the revised B), using the same $80k starting point, is as follows:

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr - x 4

1 - Appreciated value = $146 x 4 = $584k
2 - Appreciated gain = $46k x 4 = $184k
3 - Total cash flow = -$36,000 x 4 = $144k
4 - Down Payment = $20k  x 4 = $80k
5 - Accumulated negative = $20,000 x 4 = $80k
6 - Accumulated Positive = $82,000 x 4 = $328k
7 - Net Gain = $62,000  x 4 = $248k

I have $36,000/year I can invest into another 4 CF properties. If I get a total of $144,000 in CF over that 5 year period, I can invest it in at least 4 more of the same property...and in year 6 I can buy a 3rd set of 4. That means while you would have one property gaining in equity, and most likely still negative in cash flow, I have 12 properties...all gaining in cash flow...AND equity.

The more you talk the more it reminds me of that peanut route.  

Your saying this guy should sell his one investment property in a great market to take a haircut on fees, closing etc.  

Then he should start building a portfolio of smaller, cheaper cash flowing properties most likely far from his house....12 of them! 

How many flights to the Midwest, days away from family is that?

How many LLCs should he open.....he'll be on a first name basis with his lawyer. Accountant will need him to send all kinds of signatures....be filing taxes in new state. Register his LLC with the state Dept of that state depending on where.

 His taxes will be a phone book. Maybe he can use old returns in his fax/copy/scanner.   The amount of paperwork he’ll be signing  a year he’ll need plenty of scrap. 

Better buy a good scanner printer. You’ll be printing and signing a ton   

Not too mention maintenance and expenses.  Most markets Maintenace expenses are 50%.  Probably not so after a few years in Cali   

 In 25 years he’ll replace 36 hot water heaters instead of 3. 

12-24 roofs, countless fridges, stoves, toilets  

No doubt he’ll need a managing agent. Have to watch them. 

Commercial mortgages hello. 

Commercial insurance as well.  

Sounds like a job. 

The guy wants an investment property, he’s got a job.   

 Can you spell P...r...o...p...e...r...t...y  m...a...n...a...g...e...r...?

 Yes, I mentioned he’ll need a managing agent.  

 I don’t see a response to the post, do you have one? the spelling thing is cute.  I’d rather read a real response.  

 The number of properties is a comparison of value using the same starting point but different directions.

You're correct when you mention the number of properties potentially being an issue, but the PM can take care of that...and eliminate the need for constant travel.

In addition, a "boots on the ground" partner will do the same. The reduction in cash flow to this REI would substitute for the cost of the PM, but the Partner would have a vested interest in the property.

I mentioned that I never hold a property longer than 5-7 years due to the CAPEX issues you mentioned.

Originally posted by @Rene Garcia :

@Joe Villeneuve. Not in the area he's referring to. I'm looking and there and it's true. May take 1 year or 2 to get up to positive cash flow

I know. His area is not conducive to cash flow. It's not uncommon for REI in that area to flip in that area for profit, then buy in the midwest for immediate positive cash flow. Very common. I deal with this all the time.

Originally posted by @Joe Villeneuve :
Originally posted by @John Hickey:
Originally posted by @Joe Villeneuve:
Originally posted by @John Hickey:
Originally posted by @Joe Villeneuve:

@Bill Brandt  

Here's an example comparison over the first 5 years:

A) $400k property; 20% DP; $2400/yr negative cash flow, 15% avg Apprec/yr-

1 - Appreciated value = $805k
2 - Appreciated return = $405k
3 - Total cash flow = -$12,000
4 - Down Payment = $80k
5 - Accumulated negative = $92,000
6 - Accumulated Positive = $405,000
7 - Net Gain = $313,000

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr -

1 - Appreciated value = $146
2 - Appreciated return = $46k
3 - Total cash flow = -$36,000
4 - Down Payment = $20k
5 - Accumulated negative = $20,000
6 - Accumulated Positive = $82,000
7 - Net Gain = $62,000

Now, before you can say:

1 - You can raise rents...so can I
2 - As I raise the rents, I will reach positive CF...except taxes and insurance also are going up. A negative CF property quite often is like stairs going down hill. No matter how many steps you add, the hill keeps going down too.

...and, the big one.

I have $7200/year I can invest into another CF property. If I get a total of $36,000 in CF over that 5 year period, I can invest it in at least 1 more of the same property...and in year 6 I can buy a 3rd. That means while you have one property gaining in equity, and most likely still negative in cash flow, I have 3 properties...all gaining in cash flow...AND equity.

Another issue is starting point...as in "how much money are we starting with"?  Assuming the comparison is based on the same person, the same starting point for both options, that being $80k in cash, the B) option allows for the purchase of 4 of the same properties.

So the revised B), using the same $80k starting point, is as follows:

B) $100k property; 20% down; $7,200/yr positive CF, 10% avg Apprec/yr - x 4

1 - Appreciated value = $146 x 4 = $584k
2 - Appreciated gain = $46k x 4 = $184k
3 - Total cash flow = -$36,000 x 4 = $144k
4 - Down Payment = $20k  x 4 = $80k
5 - Accumulated negative = $20,000 x 4 = $80k
6 - Accumulated Positive = $82,000 x 4 = $328k
7 - Net Gain = $62,000  x 4 = $248k

I have $36,000/year I can invest into another 4 CF properties. If I get a total of $144,000 in CF over that 5 year period, I can invest it in at least 4 more of the same property...and in year 6 I can buy a 3rd set of 4. That means while you would have one property gaining in equity, and most likely still negative in cash flow, I have 12 properties...all gaining in cash flow...AND equity.

The more you talk the more it reminds me of that peanut route.  

Your saying this guy should sell his one investment property in a great market to take a haircut on fees, closing etc.  

Then he should start building a portfolio of smaller, cheaper cash flowing properties most likely far from his house....12 of them! 

How many flights to the Midwest, days away from family is that?

How many LLCs should he open.....he'll be on a first name basis with his lawyer. Accountant will need him to send all kinds of signatures....be filing taxes in new state. Register his LLC with the state Dept of that state depending on where.

 His taxes will be a phone book. Maybe he can use old returns in his fax/copy/scanner.   The amount of paperwork he’ll be signing  a year he’ll need plenty of scrap. 

Better buy a good scanner printer. You’ll be printing and signing a ton   

Not too mention maintenance and expenses.  Most markets Maintenace expenses are 50%.  Probably not so after a few years in Cali   

 In 25 years he’ll replace 36 hot water heaters instead of 3. 

12-24 roofs, countless fridges, stoves, toilets  

No doubt he’ll need a managing agent. Have to watch them. 

Commercial mortgages hello. 

Commercial insurance as well.  

Sounds like a job. 

The guy wants an investment property, he’s got a job.   

 Can you spell P...r...o...p...e...r...t...y  m...a...n...a...g...e...r...?

 Yes, I mentioned he’ll need a managing agent.  

 I don’t see a response to the post, do you have one? the spelling thing is cute.  I’d rather read a real response.  

 The number of properties is a comparison of value using the same starting point but different directions.

You're correct when you mention the number of properties potentially being an issue, but the PM can take care of that...and eliminate the need for constant travel.

In addition, a "boots on the ground" partner will do the same. The reduction in cash flow to this REI would substitute for the cost of the PM, but the Partner would have a vested interest in the property.

I mentioned that I never hold a property longer than 5-7 years due to the CAPEX issues you mentioned.

5-7 years? That's a very short window. Get him hammered on realtor,lawyer, title fees. Taxes on the gain. All kinds of stuff I love to avoid.

I would invest along side him. Keep the cash flow. Keep it simple. He is thinking long term. Retirement.  The way I see it his strategy has way more tax advantages with a lot less headaches.  

I’d bet unless Rancho Cucamonga cracks off into the sea with the rest of Cali  his investment would beat your 7 in ten years.  

Checking back here down the road.  

Originally posted by @Steve K. :

If it were me I'd be hesitant to sell right away because it appears you'll be looking at a loss and don't intend to invest out of state anyway. From the info you've provided, stating you want this property as a nest egg for retirement, I think it makes the most sense to hold (assuming you make enough in your day job to continue investing in this property by making the payments of course). Sure, it's a speculative play, but those saying "negative cashflow investing isn't investing" ignore the dictionary definition of investing:

"the output of money or capital in order to gain profitable returns, as interest, income, or appreciation in value."

Southern CA is highly likely to remain a desirable place to live so it seems like a fairly safe investment. A quick google search reveals Rancho Cucamonga property has appreciated 61% over the last 10 years, so if this trend continues on pace, you'll be looking at about $30,000/yr. appreciation which breaks down to $2,500/mo. profit. Hard to find that kind of financial gain on a SFR in any market that cash flows well, even subtracting your current negative cashflow, which will reverse itself in a few years as you are able to raise rent. Plus your tenants are paying down your mortgage, so all of this looks pretty good for your plan to sit on this property and have it benefit your retirement plan. A few hundred a month negative for the first few years is actually fairly negligible long term in a high appreciation market.

Sure it's speculation, but so is investing out of state, or in any investment vehicle for that matter. Throwing a dart at the map in a market you don't know intimately and putting your money in the hands of complete strangers thousands of miles away seems like the greater gamble in this situation to me. Just because a property cashflows more day 1 does not mean it will be a better investment over time. Sure if you were looking to quit your job and live on rental income you'd need cash flow, but for a more long term retirement play like you have described, CF is much less important. True wealth building is about more than just initial cash flow. 

In the meantime, some ideas for ways to mitigate the monthly losses would be to make capital improvements in order to raise rents quicker, look into repositioning it as a short term rental/corporate housing, collect as many fees as you can (be diligent with late fees, collect additional pet fees) and lower expenses by being as hands-on and bootstrapping as much as possible until you can start making positive cash flow on this thing: self manage, mow the lawn, minimize vacancies by screening very well, make repairs and do turnovers yourself, all the things you wouldn't be able to do when investing out of state. Good luck!

 Thank goodness that people like you have stepped out of the BP echo chamber and shined more light on CF, which is more multivaried that many people are led to believe.

Vinh-  Cash flow is important to me strictly based off of the home, area, note and game plan for that property. -$300/month is not something I would be interested in unless the tax savings is fantastic on it, making up the difference.  

I have a property right now that rent vs expense is about even, however, I receive some tax benefit because of it and it will be paid off in 8 years. (originally a 15 year note).  The house and neighborhood are nice and I have minimal concerns about a drastic decline.

I'm a conservative investor, the 30 year note appeals to me in 1 way.  You have more buffer in a down turn.   If/When the market corrects, how is that going to adjust rent?  If rent decreases, how much more negative will the property be?  No one knows, but can you afford it?  Are you in an industry that could be affected by a down turn?  If you don't have big cash reserves and could not afford any more negative cash flow, you may want to consider parting ways with the property...

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