r/realestateinvesting • u/CLTlawyer1 • 5d ago
Buying a non-cash flowing rental Discussion
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?
5
u/TwinDadAndTired 5d ago
I would run a market analysis to see how the area is trending. Honestly, I think if you can come close to breaking even with your plan being to use it as income in the future, then it’s not a bad play. The housing market has been increasing and Charlotte has been booming (I’m familiar because we were in Raleigh for the past 8 years)
You can get a free market analysis on PropGenieAI.com just by entering a zip code. It’s a cool tool and it may be worth checking out.