[Moneyguy1]

Sorry if I missed it, but adding to the positive end of cash flow is allowed depreciation and maintenance deductions. Another thing..Check with your friendly(?) local assessor. The tax rate for rental property, at least in Pima County, is higher than the rate for owner occupied. When you get your tax bill, it warns you to contact your assessor if the property is to change from one classification to another.

"This property is classified as owner occupied residential (legal class 3). If this property is being used as a rental unit, the owner must notify the County assessor of the rental use. Failure to do so may result in a civil penalty". A neighbor got caught recently. Was not happy. Never read the fine print.

All things considered, owning rental property takes a certain mindset. There is little or no leeway for error, and being "nice" is not the way to make money. Certain kinds of tenants are to be avoided, and an exhaustive background must be carried out. Who was the poster a while back with an attorney as a tenant that was giving him fits?

The primary benefit comes in a market of increasing property values, and I am not so sure that trend will continue indefinitely. Decreasing property values are already hitting some areas of the Northeast, and that could, depending on national economics, spread in future years. Currently, I would not live in Phoenix; (did for awhile, around 44th and Camelback which 12 years ago was almost on the "fringes") it is growing a bit too fast and water may become an issue. Also, according to the World Almanac, (if memory serves) of every eight people who relocate to Phoenix, five ultimately leave again. Hope you aren't renting to one of the five who disappears in the middle of the night.

Here in Tucson, where the local economy is still quite strong, the average rental property (3br,2bath) sells for about 125k and rents for about $850. Some of the rentals are seasonal, to the "snowbirds", and remain vacant during the hot months. I am not certain if this is the case in Phoenix as well.

Please do a complete analysis, both financial and of your own willingness to put up with the inevitable hassles.. It is your money, and whether you can take the crap that comes with being a landlord is a very individual decision.

Cheers!!