As a practical matter if you do make such a charge and the tenant moves out at the end of the lease or before you have to consider your potential rental losses if they go.

I think the type of policies they buy can be converted to cash after a few years, with some conversion losses.

Every deal that I have lost money on I have considered that an education expense and I have learned enough to make 10x the amount of the loss in my next investment.  

Loss of granules is a sign of roof aging.  

I agree that I'd rather leave it empty for 5 months and take the loss than risk someone coming in I wouldn't normally lease to.

In fact, the most risky endeavors are typically your first.When you eventually have a property that goes south, how do you intend to repay those losses?

Specifically how is the gain or loss on the ultimate sale calculated is it ( my purchase price plus rehab cost = basis) less whatever it sells for ?

Rental Property Cash Flow Analysis 2 br 1 bath Brick       Monthly Operating Income Scenario A Scenario B Number of Units 1 Average Monthly Rent per Unit 450.00 Total Rental Income 450.00 - % Vacancy and Credit Losses 5.00% Total Vacancy Loss 22.50 - Other Monthly Income (laundry, vending, parking, etc

if the property is damaged by fire or other casualty loss and the cost of restoration does not exceed 1.5 percent of the purchase price, the seller must restore the property and closing shall proceed according to the terms of the contract.

Unfortunately it is common for novice landlords to experience greater losses on bad tenants.