Rental with zero cashflow but has access to 40k Heloc

[Kevin Jackson]

I have a home that a friend is interested in renting, the rate that they are able to pay wont net any cashflow, I would be breaking even. I don't foresee needing a PM, or it being vacant, I'm also sure the place would be taken care of. I do have a 40k Heloc attached to the property and I think that having access to the Heloc makes this seem ok. In part I feel like the cash flow could be made on another rental, I am still fairly new to REI, and would like to know any thoughts you have. Please share.

[Patricia Steiner]

Consider this:  you're running a business. What you're considering isn't a business decision - it's more of an accommodation and easy solution. I recommend that you market the property at fair market rent and explore a quality tenant who would not only care for the property but provide the cash/ROI that brought you into REI in the first place. You're cheating yourself to do anything else.

And a word on friends...they're great to have.  But if all they can pay is what they can pay and that's below the market rent, don't set that relationship up to be contentious when at some time you decide that you can't continue to subsidize their housing.  (That's what you would be doing - subsidizing their housing...) Again, you would not be doing them - or you - a favor in the long run.

You're running a business so make decisions that are in keeping with that purpose/function. Use the HELOC to buy a less expensive property that can be rented to your friends at a price they can afford to pay - and that at the same time provides cash flow/ROI.

The old adage "no good deed goes unpunished" is one you can live without.  Take care of your business first.