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[quote=Anonymous][quote=Anonymous][quote=Anonymous]In real estate, it is always about location, location, location and timing.
We bought a 3 bedrooms TH in Frederick County for 250k in 2010. We put 5% down.
Our PITI is $1550. It will drop to $1400 once we drop the PMI next year. We rent it for $1800. 
We are cash flow positive.
[/quote]

Most real estate investors don't look for just cash flow positive, but also how it compares with what else they could do with that money as well as estimating sinking funds for maintenance/vacancy.
A common guideline is that the rent should be 2x your PITI for it to be considered a "good investment."  So merely month-to-month cash flow positive isn't actually a good thing.  You would have to look at the opportunity costs of your initial 12500 investment--and any transaction fees-- compared to a stock market index fund.  Deduct for any maintenance costs/vacancy periods etc.

On the plus side, you get to figure in the appreciated value of the townhouse minus the cost to sell (usually estimated at 10%).    But you should do this analysis regularly to see if it makes more sense to sell the investment.

[/quote]

Don't forget it might not be 2x PITI right at the start. We were breaking even when we started renting our apartment out, but rent has gone up $300/month in 6 years, and it's still going up. We could have been even more aggressive with the rate, but we like our current tenant and have been keeping the rent steady for her. [/quote]

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