1. Price of condo 200K
2. Tax = 3600/year
3. Mortgage Interest rate : 5%
4. Income you would get if you invest your home equity in other safe investment 5%
5. Insurance 1200/year
6. Maintenance fee 1200/year
7. Repairs 1200/year
8. apartment is rented for 2 years on an average and stays vacant for month after every 2 years for restoration
9. Cost of restoring 1200 every 2 years
10. you spend approximately 40 hours/year managing this apartment and that is worth 30/hour
11. your tax bracket 30%
12. you get rent of 1200/month
so following are approximate yearly income and expense calculations...
Rent = 14400
Tax saving = 7000 (approx deduction for mortgage interest and depreciation and other expenses)
Total Income : 21400
Interest part of your Mortgage Payment + Income you would have got from investing the home equity in bank deposit = 12000
Property Tax =3600
Insurance payment =1200
Monthly maintenance fee =1200
Cost of restoring the apartment after each lease term = 600/year
Cost of days apartment will stay vacant until you can rent again = 600/year
Your wages for time you will spend in managing this property = 1200
Total Expenses: 21400
Profit = Total Income - Total Expenses = 0
So it looks like it is 0 sum game as long as market value of your property does not change.
If it goes up, that will be your profit, if it goes down, that will be your loss.
In current environment you are more likely to make loss than profit.
Rent + Tax saving - Interest part of your Mortgage Payment - Income you would have got from investing the down payment in bank deposit - Property Tax - Insurance payment - Monthly maintenance fee - Repairs - Possible loss of market value - Cost of restoring the apartment after each lease term - Cost of days apartment will stay vacant until you can rent again - Any agent fee if you employ agency to find renters - Your wages for time you will spend in managing this property
If the figure that comes from above formula is motivating enough for you, go ahead.