Many people use hard money loans and cash flow SF rentals. But lets make it a step easier than that, lets say you bought the SF property in CASH no loan.
Lets say the property rents for $1,300
Well every month you are going to need to pay for, just using some basic numbers:
Property Taxes -$300 per month (3,600 annually)
Insurance -$100 per month (1,200 annually)
Basic Maintenance -$100 (1,200 annually)
Contingency Money, if the A/C roof etc has issues -$100 (1,200 annually)
Property management - $100 (1,200 annually)
=$700 a month in expenses
You bought the property free and clear with CASH, no loan. And already you are looking at your $1,300 - $700 = $600 for the month from buying in cash…
Now what if you had a loan? Principle and Insurance for it is probably going to be $600 a month as well, in which case you would have no cash flow, or negative cash flow.
And this is not even including misc. fees such as pest, administrative, advertising and legal fees
Someone help clarify here please, there must be something I am seeing wrong