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photon · 09-07-2007, 11:17 AM

So one example of a property that doesn't work to rent out means the whole market is going to crash?

I never buy a property that doesn't generate positive cash-flow out of the box. Some investors even take into account their projected capital appreciation for a property (ie take a monthly loss but the capital appreciation makes up for it when they eventually sell), however I don't like to do that.

What about all the people that buy that property to live in? They don't have to worry about making a profit, they just have to worry does it meet their needs and can they afford it.

In your example you are also at 100% financing (you're counting $425,000 @ 6%). Residential doesn't valuate like commercial since the price is dictated by supply and demand, not the raw valuation.

09-07-2007, 11:17 AM	#45
photon The new goggles also do nothing. Join Date: Oct 2001 Location: Calgary Exp:	So one example of a property that doesn't work to rent out means the whole market is going to crash? I never buy a property that doesn't generate positive cash-flow out of the box. Some investors even take into account their projected capital appreciation for a property (ie take a monthly loss but the capital appreciation makes up for it when they eventually sell), however I don't like to do that. What about all the people that buy that property to live in? They don't have to worry about making a profit, they just have to worry does it meet their needs and can they afford it. In your example you are also at 100% financing (you're counting $425,000 @ 6%). Residential doesn't valuate like commercial since the price is dictated by supply and demand, not the raw valuation. __________________ Uncertainty is an uncomfortable position. But certainty is an absurd one.