FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.