Buying a property that will inevitably rent at a loss

[Jacob G.]

I am moving to Hawaii and considering purchasing a property for the time that I will be there (2-4 years/military). After doing research, and speaking with local realtors, it came to the conclusion that the property would inevitably rent at a loss. I'm wondering if this is still a smart option to generate equity even if I'm paying the difference on the loan myself or potentially sell after my time in Hawaii comes to an end. I do plan on returning at a later date to live in the property or leverage the property to buy a different property on the island. 

My other option is to rent a property at a lesser monthly cost but miss out an opportunity to own. Any and all advice is greatly appreciated. 

[Bjorn Ahlblad]

Cash flow is an excellent and very solid way to make money in REI. But let's not overlook the alternatives. In the right market appreciation can make way more money than CF ever will. But it is a different game. You need a much longer planning horizon and you need more money, or access to more money along the way. I held properties in Silicon Valley long term that 'cost money every month' but those same properties also made money every month all depending on how you did the math, and what you were willing to tolerate. Had I been forced to sell the properties at some point along the way I could have been wiped out. But I was able to wait and when it came time to sell, those 'liabilities' had become 'assets' big time. In my case it was largely the luck of the draw, but I also recognized there was a dollar to be made as long as I was in control of the timing. REI is the best way to make money bar none!