Need advice on second rental proprty buy

[Sam Schlacter]

Hi All,

   I hope someone can help with valuable advice on following - I had bought my first rental property 6 years back and has worked out well. I bought it for 58k, started renting at 850 and currently renting at 1100 - I have always kept rent about 150 less as from day 1 I have the same tenant living there and maintenance cost has been very minimal. If I were to rent a brand new property there I would expect to get about 1250 in rent.

I am looking to invest more in real estate now and getting couple of more units in the same sub-division as this that I know rents very fast. However, the market value of the town home that I bought for 58k at the time when market was low is now 140k. So I am happy that my current property has appreciated well along with the rental it brings in but I am also hesitant now to pay up that much in the same sub division where in past I bought another property for half! :-)

Could someone help how I should look at this? For a property valued at 140k if I put 20% down and expecting rent about 1250 would it still be a buy? As a passive investor I am finding very different market now - 6 years back I could walk into many units and buy but now all real estate has appreciated higher. Thanks in advance.