Quote from @Victor Baronich:
Hi, I have been into rentals now for about 4 years. We currently have 12 rentals, all sfh's. What I am finding is that essentially we make no money and probably lose money slightly overall. I was very careful when buying to cashflow at least $200/month after all expenses (most are over $300). The problem is when a tenant leaves. Often I am replacing floors, or painting/pressure washing, and other misc repairs. And while it is quick to turn around and rent again, that 3-5k in repair costs kills the profit. One unit needed a new AC, for example. I am blessed to have family that does that so I got it replaced at wholesale, but it still wiped out a year or more of profit.
I keep thinking all I have to do is buy more and more and eventually it will show profit. But is that a reality? I mean if I had 50, well then I have 50 roofs, 50 water heaters, 50 AC's, etc to maintain. So do costs just adjust right along side cashflow?
Since a kid I was taught the Robert Kiyosaki mentality of use debt and OPM. So I don't pay for acquiring my rentals, I have investors do that. My responsibilities are the repair costs. Maybe I should pay them off to open more cash flow, but that means sinking a ton of money into the business that could be doing something else. So is that really smart?
To those that have been doing it longer and maybe have more units, what have you found over the years? Is there a breaking point where you have so many you start profiting?
I must admit, I did not read the 33 replies before me, so if I am repeating what others have said, my apologies. I don't know your market, but my first thought is cash flowing $200 per month is low. I try to cash flow at least $700 per month on each property. I don't know if that's right or wrong, but that's my rule. Now, I have to be more picky with what properties I purchase, but the deals are out there. You just may have dig deeper for them.
You are 100% correct with 50 houses = 50 roofs. I don't have any single family rentals. I flip single family homes so that i can take that profit to buy multi family properties to rent out.
I would not pay off the mortgages. Just my opinion. Interest rates are still historically low. You can use that $$ to but more properties instead of paying off your current homes.
Can you increase rents in different ways to help you out for now?........rent parking spots, add laundry machines & charge a fee?