Simple way to spot a good deal, what do you think?

[Brett O]

I just had an idea, if we could figure out the maximum amount of dollars we could pay for a property per $1 of monthly rental income we estimate the property will bring, we would have a very easy way to figure out how much we could pay for a property.

For example if I estimate a property will rent for $600 per month, and I had pre determined that $66 was the most I could pay per dollar of monthly rental income, then I would come to the conclusion that I could pay $39,600 for the house.

$39,600 @ 7% 30yr fixed = $264/Month. So I am within the 50% rule

My question/idea is how do we figure out how much we can pay per $1 of monthly rental income.

I'm pretty tired, maybe I'm making things more complicated than they need to be...

Is this a good idea?