Beak even in sfh rentals

[Tim Cook]

Is it okay to invest in single family LTR deals that break even? (Rent pays all your mortgage and expenses). I’m investing in newer constructions in a class A/B area and with current rates I can only collect rent to pay expenses without any cash flow.

[Doug Smith]

It's crazy how much profit just a small bump in interest rates makes. in Feb of 2022, we were doing DSCR loans at 4.5%...now they're 7.5% - 8.5%. That being said, real estate has proven to be the best hedge against inflation. Just look at the Charts from the St Louis Fed on Median Housing Prices over time. I also saw a great chart that overlayed housing prices and the CPI. My biggest concern is that you don't get yourself into a liquidity crunch. You'll need to weather a storm or two from maintenance and vacancy issues and possible real estate tax or insurance increases, but you can play the long game with real estate if you have the patience. I pulled that chart I mentioned. See below. Good luck.