TL;DR: it’s worth keeping a negative cash flow property, if the equity growth per month exceeds negative net income
Realestate investors whom tend to purchase properties in high growth areas, are often willing to sacrifice cash flow - in hopes for equity growth.
How would you determine if a potential high growth asset is worth acquiring?
A simple heuristic would be to check if the monthly equity growth is able to cover the monthly cash flow deficit - then it’s worth keeping.
Now the hard part is approximating equity. This is because it’s hard to value how much a property is worth. Unless you actually try sell it, you’re not really able to get a real valuation. Hence relying on lagging market estimate (i.e. the ones provided by core logic).