Buying a new home - keeping existing as a rental guestion

[Corey Williams]

I have been reading as many posts as possible in the past week and wanted to run this by you. I have read a couple posts that mention getting started by buying a new home and keeping your existing as a rental. Bingo, you now own multiple properties and you have dipped your toe into the water to see if you can handle it. I am fine with all of that, but my concern is the 50% rule that I have been reading about.

I would get $1200 per month in rent and our monthly P&I is $797. That leaves less than 50% for expenses, which I have read to include; taxes, insurance, repairs, vacancies etc. Would this factor alone make this a dead deal or do you have a more detailed proforma/speadsheet that you would use after investigating any and all of the taxes, insurance and potential maintenance problems to get a final number?

I ask because the house is 8 years old and in very good condition, and after living in it for 3 years I can't see the need for any major replacement of anything. I know I'm foolish to think nothing will breakdown, but humor me for a minute. Does your 50% rule assume the worst case scenario or that the tenant is going to damage appliances or put their fist through a wall. I am totally on board with analyzing a deal using 50% at first, but I tend to get very detailed in my analysis, especially being my first potential rental.