[l2ridehd]

I think the numbers from RealJudy are low. I have two rentals, a ranch and a designer. I set aside about $800 a month for everything on each home. That includes most every expense, cable, gas, electric, lawn, shrubs, home washing, phone, repairs, sprinkler adjustments, home watch, ads, cleaning and a few things I missed. I average about 7 months rented with an income that exceeds the expenses and covers about 50% of the mortgage. So you do not break even. In 2010 for the designer home actuals were $721 a month for all expenses.

Unless you are doing it to have a place to use when not rented and you believe real estate is a good value right now so building equity will provide a future return, don't do it. I lose about $500 a month on each property. However I am paying down a mortgage about $300 a month on each property. Between income tax advantages and equity build I still lose a small amount each month. My bet is that property values will improve in a few years and far exceed that loss.

Also when I move there full time I will reduce the expenses by doing a lot of the monthly work myself and then cash flow and equity build less taxes will be positive.