Hello Mustachians,

I am looking at purchasing a rental house in my home town. I am looking at a property that should generate $1400/month at a cost of $200,000, requiring $42,000 in initial capital. I take into account taxes, insurance, mortgage, repairs, vacancy and look to be positive by $130/month. ($1,542/year). I take NFV of these cash flows, using 8% IRR and the sale of the home (net capital gains) in ten years time to find the NFV of the rental. I calculate this to be $41,000. I also calculate leaving the funds in a TFSA at 8% and it grows to be $90,000.

My question to the forum is am I missing something, or is this just a really bad deal? It looks like a lot of extra work/risk to buy this rental to keep my money constant. I will attach my spreadsheet hoping it makes sense to anyone else.

Any and all thoughts are welcome.