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Sure it does. Why bother having rental property that loses money every month? Rent has to over all the costs of ownership plus some profit for future maintence and income.
There are definitely accidental landlords who have negative cash flow
Why bother having rental property that loses money every month?
I don’t have the answers as to why, maybe appreciation, maybe to lock in purchasing cost for future use like retirement, maybe it was a poor purchase, maybe it was an adjustable loan, maybe rental markets tanked. There’s a lot of possibilities
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Rent has to over all the costs of ownership plus some profit for future maintence and income.
If someone does airbnb of their home. Take an average of 50% occupancy at $60/night. That is 15 days rented out that's $900 per month for just 1 bed. If you have a 5 bedroom and rent 3 beds that makes it $2700/month. Since a lot of folks gotten sub 4% morgages that means they are paying around $1500-2500/month for a less than $400k home that means they are living with their mortgages paid by renters.
You're not gonna find $400k homes easily as long as the mortgage rates stays under 10% it is still doable for investors to buy more homes to play monopoly game.
I did Airbnb a property for 3 years, summers only. Three years was enough. My present home I could rent for $8500 a week in the summer but I don't. It's paid for but I don't want to bother with it.
It's pretty obvious we are headed for a massive housing and RE bust that will make 2007/2008 look easy.
7% rates are way too high on the average $350K home. Housing prices are coming down in some areas. In other desirable areas with low inventory it's not as relevant and many are paying cash. But I foresee prices dropping severely and trillions of dollars in value evaporating leaving owners and banks upside down in a way we've never seen before.
Ok 7-8 months have gone by............haven't seen it yet.
Sure it does. Why bother having rental property that loses money every month? Rent has to over all the costs of ownership plus some profit for future maintence and income.
There is actually an answer to that question:
Because money is being made on property value appreciation more than it is on rent payments. Remember, the tenant is paying for something that you will keep.
We probably lost money for a few years with our town houses. But we bought them for $40K each in the 80s and now they are paid for and worth 150K.
We didn't take any money at all out of our properties for 15 years. That's how long it took to pay off the mortgages.
Now, it's all income, and has been for over 20 years. I've been retired since 2010.
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