[quote=sdduuuude]Don’t forget to subtract the interest you would otherwise be earning on the 20% down.[/quote]$34,000 (down payment + closing) * 5% APY pre-tax (very gracious) / (year/12 months) = $142 a month

The way that I see it: (most likely very jaded and inexperienced)
Initially, I’m guessing pulling in >10% APY on an investment would equal the cash flow of a property like this (not considering improvement, vacancy and incentive costs). After rents increase in 5-10 years, the cash flow on this would greatly outweigh any investment options.

Questions:
1) For those that are more experienced, is there anything that I’m overlooking?

2) According to SDEngineer:
[quote=SDEngineer]I believe most of the time for investors to consider it a good “opportunity” you need to have at least a 30% cashflow in the unit (to cover the expected higher maintenance associated with rentals as well as vacancy times, any rent incentives (especially in todays market), etc). Still, I think there’s a lot of places that are getting close to that mark. These might be some of them.[/quote]an investor would look for a cash flow of >30%. My numbers above show a cash flow of $275/$927=29.6%. What values should that 30% be based upon (e.g. mortgage, HOA, property tax, vancancy rate, etc.)? Considering an $1100 rent (the high end of what I found on Craigslist), the cash flow would be $425/$927=$46%.

3) Are there any better areas/properties that would give a cash flow of >30%?