Is SWR the MVP? Blow by blow of a REI newbie reading the STORE -> Best Sellers

[Bob Avery]

First, obviously leverage is the MVP, but this isn't my first interneting, I know controversial titles get more attention.

Second, I’m a recent convert to Pocketarianism. Bogleheads was the source of most of my formative personal finance education (for ~14 years), and it’s relevant because the SWR discussions there are typically in the 2-4% range.

Third, I was reading Small and Mighty (thanks Nathan Gesner) and found myself doing a "Wait a minute..." when he lays out that for B-ish SFHs he wants at least 6-7% rental income (after expenses), 3% appreciation, relative to the house price. Up until then I was cheerleading the earlier thought experiments about supporting lean/regular/fat income with ~$1000 / month per paid off SFH, thinking "I could bang that out in 5 years". Kind of marveling, in the back of my head, at how well REI supports retirement income, but not really groking it. Seeing 9-10% return On Paper, I couldn't help but connect to the long term RoI of stocks. Yes, I know Vanguard's recent-ish medium term projection for Large Cap Blend is 3-5%, but please; I don't want to lose, in the weeds, this narrative momentum I've worked so hard for. So I say, I say "Wait a minute… How come REI supports income streams so much better than Stock / Bond portfolios if it has the same return as stocks?" Eventually I realize that when I think about living on post-expense rental income, I'm treating the income as the "withdrawal rate", in Boglehead parlance. A withdrawal rate of 6-7% there would be laughed out of the room.

I suppose here is a good time to ask you all, the “more expert than me-s” in the thread: on a scale of “5% return standard deviation bond market” to “15% return standard deviation stock market”, where would you put the unleveraged, post expense rental income of a well managed (aye, there's the rub) SFH portfolio?

And if 6% is on the Safer-Withdrawal Rate side, is that the real secret sauce of unleveraged SFHs?