Head Of In-Lease Experience

Head of Marketing

Co-Founder & Head of Product

Head of People

Explore what to do with an investment property that’s negative cashflow.

Your Investment Property Is Negative Cash Flow. Should You Hold or Sell?

What to do with an investment property that’s negative cashflow.

Is your rental property starting to feel more like an expense than a lucrative investment? Maybe your rental home is barely breaking even, and you’re not able to cover your costs in rent. You might even be losing hundreds of dollars a month, struggling to keep up with mortgage, property tax, and maintenance bills you can’t afford. 

What should you do? Do you hold onto the property, or sell right away? 

At first, this question might sound counterintuitive. Why would anyone hold a negative cashflow asset? Isn’t the whole point of an investment to make money? 

Well, yes — and often, that does mean selling is the right thing to do. But property is a little different from other types of investments. There are situations where holding a negative cashflow property can be the right decision, but it depends on many different factors. 

Today, let’s explore why your home could be negative cashflow, strategies to get it profitable again, and reasons you might choose to hold or sell. 

First of all, let’s clarify why you’re losing money on the property. 



There are many possible reasons your property could be cashflow negative. But generally, this situation arises either by accident, or as a strategic, calculated decision. 

You might be surprised to learn that many people buy property knowing it won’t turn a profit — at least not right away. 

This is a common property investment strategy called negative gearing. When owners buy a property they know won’t cover its own costs, they’re betting that eventually, the home will rise in value enough to turn a profit. That could happen by commanding a higher rent, or from the proceeds of a sale. 

Obviously, negative gearing is a higher-risk investment strategy than buying a profitable home. But that doesn’t mean it’s never a wise decision. 

Negative gearing is more common in super-hot housing markets, like large urban centers. In these settings, prices might be high and down payments low — but buyers can be more certain that their home’s value will continue to rise. 

The costs associated with the property might reduce the owner’s total tax burden, because they’re counted against other income. 

However, often the owner of a negative cashflow property did not plan for their situation. They were seeking out another income stream, only to find themselves losing money. 

Property investing is complex — it’s easy for buyers, especially novices, to overestimate how much they’ll be able to earn. Plus, homeownership is full of unexpected expenses that can eat into cashflow. 

Investors might not realize how expensive repairs and maintenance can be. They might be out of touch with market rents in their area, leading them to lose money on a rent that’s too low, or on a vacancy, if they set it unrealistically high.   

When buying a rental property, buyers can’t just assume that they’ll make money by renting out their home. They need to run the number and do an actual analysis, ideally with a property accountant and an expert on their local market. 

Losing money on an investment is scary. But a negative cashflow property isn’t the end of the world. 

If you want to get your property out of the red, first you need to analyze where your income and expenses stand now. Then you have two options — reduce what you’re spending on the property, or find ways to charge more. 

No matter what, start by performing (or revisiting) your comprehensive cashflow analysis. 

You can’t make your home profitable until you actually understand what you’re currently spending, and what the realities of your local rental market might allow you to charge. That includes the cost of holding the property right now, and a nuanced understanding of your local market. 

If you didn’t complete a cashflow analysis when buying your home, now is the time to contact an accountant and get started. If you did run the numbers, but you’re still losing money, come back to the analysis with expert assistance to identify where the problem is. 

Owning a property comes with three major kinds of expenses — property tax, your mortgage payment, and maintenance or repairs. Here are a few ways to get the monthly cost of each down. 

Reduce maintenance fees by finding reliable, better-priced contractors. Or, try finding a management company (or modern alternative like Belong) that can do so for you 


Make sure you’re taking advantage of tax breaks to reduce what you owe. Work with your accountant to audit and optimize how you file taxes


If possible, renegotiate your mortgage. For example, maybe interest rates are down, or a longer tenure could reduce your costs 

After reducing costs, look at ways to increase what you can charge for your property. Here are a few ideas.

If your cashflow analysis revealed that you’re charging below market, raise what you charge in rent 


If there’s demand for short-term rentals in your area, try listing on a site like Airbnb instead of looking for long-term residents 


Raise the value of your home by renovating. This could allow you to charge at the higher end of your local market rate 


Rent out any spaces, like a parking spot or a garage that current tenants aren’t using

Holding a negative cashflow property only makes sense if you believe the home will become profitable — and you can afford to hold it until it does. Deciding if negative gearing is right for you means assessing both your personal financial situation, and the realities of your home and market. Just like so many other choices in property investing, it’s a highly individual choice with no hard-and-fast rules. 

Maybe your personal circumstances have changed, such as through a job loss or unforeseen expenses. If you can’t afford the extra costs on the property, it doesn’t matter whether or not they could pay off in the end. 

Or maybe the property itself has issues you can’t fix. If the home is in an undesirable location, a weak rental market, or has serious maintenance-related problems, it could be that no amount of waiting or renovation will make it profitable.

Only you can decide when owning a negative cashflow property isn’t working — but we still recommend taking advantage of some expert advice. If you need some guidance on how to manage your rental home, reach out and book a consultation with us at Belong. 

From hold or sell to making profit-friendly changes, explore what to do with an investment property that’s negative cashflow.

More than just paying rent on time, great tenants will care for your home like their own. Here’s 10 steps to attracting the perfect tenants to your rental home 

10 Steps to Attracting the Best Rental Property Residents

Attracting great rental property residents is so much more than a business transaction. 

Of course, you want to find residents you can trust to pay rent on time. But you’ll also be sharing your home with them, and entrusting them to take good care of it while they live there. 

That can feel like an overwhelming task, especially if it’s your first time renting out property, or you have a deep personal connection to your home. You want to find residents who are just the right fit and who will love your home as much as you do. 

The answer is to show residents that you’re committed to providing a wonderful living space, and that you care about what kind of life they can build there. Here’s a step-by-step guide to attracting the perfect tenants to your rental property. 

Before you start looking for residents, ask yourself if this is a home you’d be happy to live in yourself. Look around for broken, worn-out, or dated fixtures and appliances, and replace or repair them to get your home up to date. 

The best residents aren’t just looking to move into whatever home will accept them — they want the best place they can possibly afford. That means you need to offer them a modern, livable, and comfortable space. 

There’s no need to spring for a luxury, high-end renovation. In fact, doing so could be harmful if you end up pricing your home out of market rents in your area. As long as you’re offering tenants an updated home in good working order, you’ll get plenty of great applications to choose from. 

Renting out your home isn’t a matter of just charging whatever you want. Set your rent too high and you’ll hardly get any applications, while if you set it too low, you’re leaving money on the table. 

Research market rent in your area using sites like Zillow and Craigslist, then decide on a fair price for your area, the size of your home, and how up-to-date it is. 

If market rent is below what you need to cover your mortgage, property taxes, and maintenance, that could mean renting is not the right option for you. 

Read More: 12 Rental Pricing Factors 2022: How to Price Your Rental Property

Now that your home’s updated, the logical next step is to show it off at its best. That means deep cleaning and light staging, ideally including a fresh coat of paint. 

Pay attention to details! If you want residents who will take good care of your home, you need to show them that you take good care of it, too. Those extra touches, like fresh flowers and throw pillows arranged just so, can go a long way toward showing that you take pride in your space. 

Don’t forget about the outside of your home, either. Before every showing, rake up stray leaves, pick up trash, and mow your lawn if you have one. That will help you make a good first impression before potential residents even walk through your door. 

Every neighborhood is different, and best-suited to a certain type of person. Get to know what makes your area special, such as the parks, schools, grocery stores and other amenities around your home. 

Are you in a hip district that would be great for a young person, or a quiet, residential area right by a preschool? By sharing plenty of information about your neighborhood — including its shortcomings — you’ll be able to help people make a good decision and assess if it's the best fit for them. 

Remember, you want to attract the right person, not convince people to move in no matter what. 

Read More: How Your Property's School District Affects Rental Pricing

Who’s your perfect tenant? If you think about what you’re looking for beforehand, it will be much easier to pick out a great application when you see one. All the work you’ve done to assess your neighborhood, market, and improve your home itself will come in handy here. 

Before you start accepting applications, try coming up with an ‘ideal resident profile.’ This can include both non-negotiables, like non-smoking or no pets, and nice-to-haves, like “works a 9-5 job” or “doesn’t mind traffic noise.” 

By considering these factors, you can start to piece together what your perfect resident might look like. Maybe your home is great for a single person who works remotely, or a young family who loves the outdoors. 

A great listing makes your house seem as appealing as possible. The goal is to get people excited to come and see it!

Be as descriptive as you can when crafting your listing. Include plenty of detail about the home, the terms of your rental agreement, and the location, plus multiple photos or videos. The more information you give people, the more likely you are to attract the right tenants. 

You should also give your listing a warm, human touch. This is your potential resident’s chance to get to know you, as well as the home itself. Show them that you’re a good communicator who puts effort into running a rental property, and that you care about their needs. 

Read More: How to Market Your Rental Property and Find a Great Resident, Fast

7. Try individual showings, not a mass open house 

Seek quality, not quantity. Instead of a single, chaotic open-house, set up individual showings with only the residents you’re most interested in. 

This gives you a chance to get to know them better and shows them that you’re conscientious, considerate, and looking to build a respectful long-term business relationship. 

Demonstrate to applicants that you care about their needs by fitting in showings around their schedule. If there are residents in your home currently, be prepared to work around their availability, too. 

8. Prepare handouts to make resident’s lives easier

To generate interest in their properties, many real estate agents prepare one-page documents or brochures to hand out at viewings. Why not take a page from their book, and wow applicants with your dedication to customer service? 

Assemble a one-page document with important details about the home, its area, and the terms of your agreement, like lease duration and smoking restrictions. If you really want to go the extra mile, flex your graphic design skills and create an appealing, colorful brochure.

This kind of attention to detail shows preparedness and an investment in your residents’ experience. Show them that you take renting out your property seriously for what it is — a job! 

Once you’ve attracted some amazing potential tenants, make it as easy as possible for them to apply. Hand out complete application packages at every showing, including your lease application and request forms for any other information you need, like references and employment information. To create helpful all-in-one packages, you can bundle these together with the handouts you prepared in step 8. 

You can also consider accepting applications online. Removing as much friction as possible from the process will ensure you get plenty of great responses. 

10. Vet prospective residents thoroughly 

If you’ve followed these steps, you should have a large pool of residents to choose from. That gives you the opportunity to be very selective, and carefully vet your new tenants to make sure they’re trustworthy and responsible. 

Looking for an investment property is different from a home you’ll live in. Know what to look for

Buying an investment property? Here’s what to look for

Looking for an investment property is fundamentally different from seeking out a home you’ll live in yourself. 

When you’re looking for your own home, your personal preferences come first. But a good investment property should be as appealing as possible to its future residents.

Risk is a natural part of making any type of investment. You can’t totally eliminate that risk, but you can greatly reduce it by considering your options carefully. 

Shopping for an investment property is all about understanding the area, the local market, and the home itself. Here’s what you need to know to get started. 

Remember, a home itself can always be updated. But you can never change the location! 

Before you start considering actual investment properties, take your time to figure out which city, area, or neighborhood is right for you. That means analyzing both the market realities of the area, how livable it will be for future residents. 

Start by assessing how strong the rental and retail market is in your desired location. What are homes selling for? Is there a high vacancy rate? 

You’ll also want to understand property tax in the area. Different cities, regions, and municipalities all charge different property tax rates. 

Next, it’s time to learn about what makes the area a great place to live. 

What kind of amenities, like parks, schools, and gyms, are nearby the homes you’re looking at? Is there a healthy job market in the area? And don’t forget about the crime rate. Is this a neighborhood where residents will feel safe? 

Some of these criteria will depend on the type of home, and what kind of residents you’re looking for. For example, schools are much more important near a single-family home than a one-bedroom condo. 

Doing this preliminary research is a great way to get started. But once you’re ready to move forward, you’ll want to connect with a real estate agent who knows the area well. 

A condominium or a single-family home is usually the best way to get started with real estate investment. 

Commercial and multi-family buildings can be very lucrative investment properties. But you shouldn’t try to jump in with a property like that your first time. These buildings are incredibly expensive, and managing them is much more complex. 

Whether a condo or single family home is better for you depends on your budget and financial needs. 

Because they are smaller, condos will typically be much cheaper than a detached home. There’s also less labor involved in upkeep and maintenance, because external work on the building is handled by the strata association, paid for by owners’ fees. 

However, you can generally expect faster resident turnover at these homes. Often, though not always, these renters aren’t yet ready to settle down long-term. 

Single family homes are much more expensive, but can also command higher prices in rent. Plus, residents are more likely to be looking for a stable, long-term home to raise their families in. 

If you can afford the higher purchase price and can budget for more maintenance and repairs, single family homes can be an ideal investment. 

Ideally, an investment property will continue to rise in value long after you purchase it. 

There’s no way to guarantee that a home will appreciate. But there are a few attributes you can look for, to assess a home’s appreciation potential. 

First of all, some housing markets are just stronger than others, and consistently appreciate in value over time. In other markets, homes may fluctuate in value, stay static, or even decline. A common example would be that housing markets in urban centers are usually stronger than those in rural, sparsely populated regions. 

Some types of property, such as waterfront property, can be more likely to appreciate, too. 

Also, if your home needs some affordable, minor improvements, you may be able to boost its value by updating. But beware fixer-uppers and home-flipping! These risky ventures are often much more costly than expected, and don’t deliver the same profits as they do on TV.

The most important piece of budget advice is to never buy a home you can’t afford, no matter how much you think it may appreciate in value. 

There is more risk involved in real estate investment than when buying a principal residence. You need to make sure that you have the financial cushion to weather unexpected costs like a vacancy, or eviction, or decline in value. 

A good rule of thumb is to pay no more than 12x annual rent for an investment property. You should also plan to pay more for the down payment. Expect to put 20% down, if not more, on a rental property, compared to as little as 5% for a primary residence. 

Choosing the right rent means you’ll find residents more quickly — and not just any residents, but people who will love your home for years to come. 

Don’t just choose a number that works for you out of thin air. Research average rents in your area, then tweak them based on factors like your home’s size, age, and nearby amenities. 

Rent needs to cover your annual mortgage, property value, and insurance costs, plus a generous margin for maintenance and repairs. Having the ability to handle some repairs yourself, or building relationships with reliable, well-priced professionals, is an important way to keep costs down.

A good rule of thumb is to charge 1% of the purchase price in monthly rent. While you may not be able to follow this guideline precisely, it is a good way to ensure that the rental property is profitable. 

If you want to provide your residents with a welcoming home they can love for years, you need to stay on top of maintenance and be responsive to their needs. To deliver the level of service your residents deserve, approach renting out your home as a part-time job, not a passive income stream.

If you don’t have time to devote hours every month to managing your investment property, consider working with a rental partner like Belong. 

We are a modern, people-focused alternative to the inefficient, low-tech property management companies of yesterday. Not only do we help owners with the time commitment and costs of maintenance, but we help you set the best possible rent, and find residents who love your home as if it was their own. 

Get in touch and find out if your home qualifies today.

Buying an investment property? Looking for an investment property is different from a home you’ll live in. Know what to look for when buying an investment home.

Buying An Investment Property? Here’s What To Look For

Inherited a property? Whatever you decide next, this guide explains your options after inheriting property, and the key factors you’ll need to consider. 

Inherited a Property? Here Are Your Options

Inheriting a home can be as exciting as it is emotional. 

Often, owners inherit property after the passing away of a loved one. Suddenly, they’re navigating the world of homeownership while trying to process a tragic event. 

If this is your experience, it’s normal to feel frustrated and overwhelmed. You — and anyone else who’s co-inherited the home — need to decide whether to sell, rent it out, or move in. But how can you make a smart financial decision during such a challenging time? 

Only you can decide how best to move forward. 

But if you approach this decision with patience and care, you might find owning property to be incredible for your financial health and goals, no matter why you inherited it.

Today, we’re here to explain what your options are after inheriting property, and what key factors you’ll need to consider. 

First things first — is the home paid off, or is there an outstanding mortgage? 

This is the biggest variable that determines how you’ll proceed. The first thing you should do after inheriting a home, if its mortgaged, is get in touch with the loan provider. 

Here are a few immediate questions to ask: 

Does the mortgage have a co-signer? If so, they will be required to keep making the mortgage payments.

Does a surviving spouse live in the property? If so, they can typically keep making payments, whether or not they were on the original loan.

Will the lender allow you to take over the mortgage? Some loans allow the transfer of monthly payments, known as an assumable mortgage. Others will require it to be paid off in a lump sum. 

If there’s no co-signer or surviving spouse, you’ll need to assess whether you can pay it off yourself. 

If you can afford to pay off the outstanding balance at once, doing so is the best choice — and depending on your lender, may be the only option. 

Assess whether the homeowner took out any life insurance or mortgage protection insurance policies. If they did, you may be entitled to a payout that could cover the remaining cost. 

If the home’s mortgage is assumable, you may be able to take over monthly mortgage payments. You’ll need to discuss the details of the loan with the provider, to figure out if this is an option for you. 

Be sure to take the mortgage into account when you’re assessing whether to sell, rent out, or move into the home. If you can’t cover the assumed payments, or the lender won’t let you take them over, selling the home may be your only option. 

When you inherit a house, it adds to your wealth! That’s a good thing — but it does mean paying some additional taxes. 

Generally, you’ll want to consider capital gains and estate taxes when you’re inheriting a home. But the good news is that there are exemptions from both taxes that can greatly reduce, or even eliminate, the costs you need to pay. 

In the United States, only estates worth over $11.7M are subject to federal estate taxes. State estate tax thresholds vary, but they’re typically high as well. 

So, if you need to pay estate taxes, consider yourself lucky. You’ve inherited a very valuable property! 

There are also strategies to reduce what you owe in estate taxes, such as establishing a trust. If the estate is inherited by a surviving spouse, they are generally exempt, too. 

You’ll only need to pay capital gains tax once you sell the property you inherited. Capital gains is charged on the rise in value (the capital gains) between when you acquired the home, and when you sold. 

There are some exemptions to know here, as well. But importantly, they typically apply only if the home is your primary residence. If you’ve inherited the property, that is less likely to be the case. 

Typically, your first $250,000 of capital gains are tax-exempt, or $500,000 for a married couple. But again, that only applies if the home is your primary residence — meaning you’ve lived there for two of the last five years. Gains above this threshold will be taxed like income, dependent on your income tax bracket. 

It’s safest to assume that unless you move into the inherited home and live there for multiple years, you will not be eligible for a capital gains exemption when you sell.

After assessing the mortgage and tax situation, it’s time to consider how you’ll move forward. After inheriting a home, you have three options — sell the property, rent it out to new residents, or move into it yourself!

If you need housing, or you’re looking to improve your housing, this can be an ideal option. It’s tempting to see an inherited home as “free housing.” But homeownership is never free, even if the home is completely paid off. 

Start by assessing what you’re paying for housing now. Are you renting, or living in another property you own? If you moved into the inherited house, what would you do with that property? 

Then, consider the combined cost of property taxes, insurance, maintenance, and mortgage payment at the inherited home. 

Compare the two costs, as well as the positives and negatives of both properties. Which choice works best for your lifestyle, goals, and budget? 

If you don’t need housing and liquidity is a priority, you may choose to sell the inherited home. 

Research sale prices for homes in your area, and the general state of your real estate market. Are homes selling quickly? Are they closing at, above, or below the asking price? 

You’ll also need to account for closing costs, as well as the outstanding mortgage balance if you have one. How much will those costs eat into your profit? 

Listing and selling a home can be a complex undertaking. To get the best possible price, consider working with a realtor who’s an expert on your local market. 

If you can find the right tenants, renting can be an exceptional way to earn more money from your home. Instead of a single sale price, you turn your inheritance into a long-term income stream.

Just as you’d research real estate in your area, you should also get to know your local rental market. Is there a high demand for rentals in your area? What kind of tenants is the home best suited for — singles, couples, or families? 

Run the numbers carefully. You need to understand what your local market will allow you to charge, and whether that price can cover your mortgage payment and other property expenses. 

Before pursuing this option, make sure you understand the cost and time associated with owning a rental property — many owners underestimate how demanding landlordship can be. 

Whatever option is right for you, you need expert advice to make a smart, informed choice. 

Afton Brazzoni

Melanie Kershaw

Tamara Epelbaum

Sparsh Mehta

Tyler Infelise

Flora Fiorillo

Melanie Kershaw

Tamara Epelbaum

Sparsh Mehta

Tyler Infelise

Flora Fiorillo