How are you making any money with Rentals?

[Anthony Newbold]

How are you making any money with Rentals?

OK...  I know.  Pretty general question.  But truly...  how are you doing it to your satisfaction.  Now here is the reason for the question, and of course I would like to hear input.  I am brand new to this forum, so I suppose I would like to get a feel for how everyone 'thinks' or processes their real estate investment.

OK..  I purchased a home for 40K that will rent for $650.  After all expenses, debt service, vacancy and maintenence, the cash flow will only be $145/mo.

So I will be receiving $650/mo but only keeping $145/mo until the first small crisis that will cost 2K (roof/ furnace/ toilet, etc...)  AT which time will not make any of this worth my time.  NOTE:  I will be doing all of the property management, etc... sleepless nights, etc...

So.....  why do you do it?  Honest question.  And honestly, I appreciate all responses.

[Russell Brazil]

@Anthony Newbold How much do you have into the property?  If you put down 20%, then your cash on cash return is like 20% with that $145 a month. If you put down 25% your cash on cash is 17%.  Ive got to say those are phenomenal returns. Yeah $145 a month may not be a large amount of money, but you did not invest a lot of money. 

(I was not factoring in closing costs just to make the math easy)

What is investing? It is deploying capital to get a return on that capital.  If I am deploying my capital to get a 20% cash on cash return, I would do that every day.