In the second year, assuming the same vacancy and repair costs, the cash flow would still be negative by $46.

This doesn’t negate the need to check the lines, however.Pay Attention to Pride of OwnershipAmateur repairs—or a lack of repairs—and deferred maintenance are typically the result of a “low pride of ownership.”

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

To me that expense would negate the increased profits of STR, which is the whole point of STR. 

The covered parking area and patios should have adequate drainage to prevent water accumulation and potential damage.Investment ForecastPurchase Price: $849,900Total NOI over 10 years: $308,782.13Year 10 Value: $1,256,336 (based on a conservative 4% appreciation rate)Annualized return: 6.30%ConclusionWhile this property is poised for appreciation, sustaining it over several years for substantial returns would require substantial financial resources due to high debt servicing costs and negative annual Cash on Cash (CoC) returns.

From my assessment and experience, B-class locations will have negative cash flow (not break even), depending on how you define them. 

Negative Cash FlowOne of the most common reasons to sell a rental property is when expenses greatly exceed rental income.

We made a bet: be okay with no (or negative) margins on cleaning and let high quality reviews pay dividends years later.It’s paying off. 

Maybe it's so high because the DSCR is negative on paper?

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.