what are you asking? if you are asking if you should be into a place for 140k that rents for 1000/month, then no that doesnt make sense. whats the fixed value of the home? i would also look to manage my own properties until i physically cant. not worth paying a property manager for 1 property.
If you buy a house cash for $140,000 that rents for $1000/month you will make $12,000/year. (This is all minus expenses which is assumed to be constant across all houses)
If you put $10,000 down on 14 houses and take mortgages of $700/month on each house that rent for $1000/month, that will make you $50,000/year.
Real estate is no better than any other investment except for leverage. Instead of controlling a $140,000 house you could control $1.5million worth of real estate along with the associated benefits.
Also to add, I do not know what you consider other expenses but remember there are tons and never forget about vacancies. We all love to get rent 12 months a yr for ever but it just does not work, so you need to add at least 2 months vacancies and advertising expenses to your years cost figures, plus legal expenses, eviction cost, add in money to be set aside for roof repairs unless you have a brand new roof, A/C, heat/ Water heater (age plays a factor in when they get replaced and cost money), landscaping, snowremoval (unless in Fl), water, trash, sew (find out laws if renting and tenant does not pay, do you have to pay it)
Also in todays market, many investors will not buy unless under 65% ARV. Even if a house will appraise for 200K, think what it would sell for to an end buyer, most likely $185K, so from 185K deduct 30-35% and your in the 125K area for a good deal.
Remember with rehabs you need the UH OH money set aside. This is when the contractor says, Oh this needs to be replaced to, or the I thought we can get it for this price but can’t. I like to add 20% to my estimated rehab cost.
What I find difficult is that I have to compete buyers/investors who bet on appreciation. They don’t seem to care much about cash flow. They get in with a flimsy cash flow hoping that in the long run property will appreciate. I live in the West Coast where property prices are still pretty high!!
Thanks guys. It makes me wonder how anyone in the West Coast markets ( CA, OR, WA etc) make money investing in rental real estate? Rent to value ratio here does not make any financial sense …