How to not run a rental business

[Reid Mayo]

I just moved into a new place (I'm renting) at an amazing price. From my knowledge gained on these awesome forums, and of the local market in general I knew that my landlord had to be hemorrhaging cash on this rental.

Finally, my curiosity got the better of me so I decided to figure out just how much.

It surprised even me...

Purchase price in 2006 = $220,000
Rents from my roomates and I = $715

50% rule expenses = $357

30 year Mortgage at 5.4% interest = $1235

-$877 cash flow per month
-10524 cash flow per year!

Ouch, It could be worse guys...

Reid :wink:

[Brian Levredge]

Just make sure that your landlord is actually paying his or her mortgage and not just pocketing your rent. I get calls all the time from people who are looking to move because the place they are renting is being foreclosed. Best of luck.