The best way to analyze real estate cash flow is to complete an APOD (Annual Property Operating Data) worksheet, including all cash flows and tax implecations (taxing & depreciation/cost recovery) to determine the before and after tax ownership benefit (or loss).This is only the first step in analyzing a property's performance.

Operating expenses include taxes, insurance, management (even if you do it), maintenance, advertising, utilities (at least during vacancies), capital expenses (although not technically an operating expense), entity maintenance, legal fees, evictions, court costs, evictions, damage done by tenants in excess of the security deposit, I could go on and on.At any rate, you left out all of these expenses, which means your negative cash flow (even with your interest only loan) would be a monthly LOSS of about $768 per month (over time).Good Luck,Mike

You'll have all the other holding costs -- insurance, taxes, utilities, maintenance (besides the rehab,) and maybe HOA fees.

The tenant handles all the insurance, maintenance, taxes, etc.

They get paid regardless of what happens and in fact often get paid more for frequently placing tenants and arranging maintenance.

The HOA can making renting very difficult.But don't you think there can be advantageous such as low maintenance and possibly better quality tenants when comparing a house at similar value?

The Lessee also offers to be reposnsible for all normal maintenance, not including major repairs like a failed furnace - there can be a dollar cap on what the Lessee would pay for.

You're missing maintenance, property management (even if you do it yourself), legal fees, advertising, and capital reserves (e.g., that new roof that will eventually be needed).

Often appears to be less because only the most obvious expenses (taxes, insurance, utilities) are included and others (maintenance, property management, advertising, legal, evictions) are neglected.

I think my threshold would if the annual rental income was more than about 20-25% of the sales income, I'd keep them.