Thinking about first property

[Heather Brooke]

Hey everyone, 36F this is very new to me. I’ve been reading and looking at my local market trying to determine how to get started. My husband and I have 3 kids, our primary residence is recently completely paid for ($650k) and we have W2 income of around $250k annually (first year making this). We’d like to start bringing in some passive income and are interested in single family homes in our area to hold and rent. We have a down payment but I’m a pretty risk adverse person so I’d likely wait to save up more to put down before pulling the trigger. The problem I’m having is finding a good deal. Comparing purchase prices in our area to monthly rental income in the same neighborhood I’m having trouble figuring out how people are getting 1-2% of purchase price each month. Most of the rental neighborhoods I’m considering have houses selling around $375-400 and are renting between $2-$2.4k. What am I missing and how are people making 1-2%? Thanks for your help!