Our default is no: don't sign up to feed a monthly loss, and don't keep feeding one without a clear fix. Investor Michael Zuber calls a negative-cash-flow rental "feeding the alligator," and the label fits. Being able to cover a few hundred dollars a month doesn't mean you should. Over a year that shortfall adds up to real money, and the capital has to keep showing up whether the market cooperates or not. A shortfall can be worth carrying in a narrow set of cases: - A genuine trophy or pride-of-ownership property in an area with a strong long-term appreciation history. - Rents sitting well below market, with a realistic path to raise them. - A clear value-add plan that erases the negative. Even then, that's a move for a seasoned investor with solid reserves, not a first-timer without a cushion. When you run the numbers, weigh the monthly shortfall against the principal you pay down each month and any realistic appreciation, and be honest that nobody can promise a property will appreciate. Then ask the harder question: could that same capital earn a better return somewhere else? On taxes, the paper loss may be a partial write-off depending on your bracket. Confirm that with your tax advisor instead of assuming it. In most first-deal situations we've looked at, a property bleeding cash every month with no clear fix doesn't pencil.