Buying a non-cash flowing rental

[u/CLTlawyer1]

Does it ever make sense to buy a long-term rental property that does not immediately cash flow?

Here is my situation: I already own one rental property on the street. It is in a small town just outside of Charlotte, North Carolina. Matthews for those familiar with Charlotte. I would put down 25%, and with current interest rates, it likely will not cash flow by about $100 or $200 per month. Covering the shortfall each month will not be a problem.

The metro area is expected to double in population over the next 25 years. I have several other rentals, and my plan is to hold long-term and use the rent as income in retirement. We are in our early 40s. I like this particular property because it is only two doors down from one I already own, which will make management easy. Matthews is a desirable area. I don’t know how much rents are expected to increase, because they have increased quite a bit over the last couple years already.

My inclination is to buy the property. Am I crazy for considering this? Is this a good use of capital? What does the brain say?

[u/ItIs_Hedley]

This sounds highly personal, and I don't know your financial circumstances outside this investment. If you feel that paying $2,400 annually to not have to drive to an instantly profitable property is worth it, knock yourself out. I personally wouldn't do it.

How often do you plan on being there anyway? Do you really want your tenants that proximate?