# Buy and live for x # of years, then rent, How do I calc Cash Flow

2 Replies

I might have somewhat of a unique scenario, but I am just trying to do the best I can.  My scenario is I am trying to purchase a single family home that is NOT a fixer upper.  The reason is primarily the timeframe.  He is traveling to work over 2 hours a day (crazy).  So, I want to buy a house he can live in for a while and eventually become investment property we can use to rent out.

The plan is to buy a single family home that my son lives in for x # of years.  Once he moves out, I would like to hold and rent the property.  I have tried using the calculators and feel as if they do not help to guide me in this situation. Help?

Let me give a simple scenario we can try to work with:

* Lets say a house is \$100k

* Taxes are 1500/yr

* House could rent for \$1000 a month.

If my family lived in the property for 2 years and then decided to move out. How can I figure out if this property would cash flow positively at that point?

Really appreciate any help, Thanks!

plug it into the brrrr calculator on this site.

there are other costs that you need to factor in, but you can do a rough estimate using a few calculations.

@jscott explains this scenario and price point on his site using the 50% rule

http://www.123flip.com/education/the-50-rule/

also consider the 2% rule which basically states that if you invested \$100000 then you want at least \$2000 in rental income

100000x.02 = 2000

it is unlikely that you'll find a turnkey property (one you don't have to rehab) that will provide you a decent profit margin as a rental.

my suggestion would be to find a duplex or something similar that he can live in and rent out the second half while he is there to offset the costs.

@Colleen Marzigliano I don't think your scenario is as unique as you think.  I think you are smart to plan ahead of time about it being a rental so you can make sure the numbers work before you get to that step. But a lot of people decide to move out of a family home and keep it as a rental.  My suggestion to you would be run the numbers as if you were to rent the property now, you have an idea of what the house could get for monthly rent,  you can not predict rental price for 2 years away anyways.  If you run all your numbers as if you were going to rent it out from day one and it makes sense to purchase it as a rental then the number should still work for you whenever your son moves out of the house.

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