Originally Posted by
freezingflyboy
Bingo! Great rule of thumb that has served me well. Don't look for the flashy condo in the trendy neighborhood in the sexy town. The ROI just isn't there (unless you want to go upscale AirBnB-type situation, but that's a whole 'nother conversation). If you wanna talk numbers: My first rental property I paid $135K (3BR, 2BA in a good subdivision on a nice lot). Currently rents for $1500/mo with my total cost being $800/mo (mortgage, insurance, taxes, HOA fees, management company fees). I've stuck to single-family homes and try to rent to families or young couples. The turnover tends to be lower which means lower costs and fewer headaches.[/LIST]
That is nearly an exact match of my first rental property purchase. It's amazing how good the numbers really are over decade or more. Splitting investments evenly between the DC plan and real estate for the last decade has created a buy and hold portfolio with more equity than the retirement plan. The portfolio also produces monthly cash flow that the retirement plan does not. I'm a huge fan of buy and hold real estate as part of a retirement plan.