Trying to figure out how these rental numbers can work

[Heather Ippolito]

I'm new to this and have been trying to analyze a few properties just to get the hang of things. I was looking at a few properties that cost around $230k and the mortgage would be more than the rental income ($1300). That clearly will get me no profit and all debt. I really have no idea how to identify properties and price ranges where any profit can be made. Total newbie question I know but well, here I am, trying to learn. Thanks :)

[Dyanne C.]

A good place to start is to look at properties that will rent for at least 1% of the purchase price. 100k home should rent for at least 1k.

That really doesn't guarantee anything until you break it down expense by expense, but its a really good way to eyeball it and filter out potential properties. The closer you get to 2% the better it'll likely be. They call these the 1% and 2% "rules" which is just a rule of thumb.