Strategies for finding an investment property - 2 Questions

[Jeff Howard]

I am in the Oklahoma City area.  I am starting to look at houses to buy and rent, have picked out 3 or 4 that I think are decent, had a couple of questions though.

1.  I have found a house in a neighborhood that I like and am considering.  The house sits within a square mile block of maybe 1000 to 1500 houses.  There are 30 houses for sale in that 1 square mile and 14 house for rent in that same square mile.  Furthermore zillow shows that all rental properties have different "posted" dates but none for no more than 16 days for this area.  The question is this.  Would that many houses for rent scare any of you?

2.  Question 2 is this, in general, not necessarily related to question one.  When you evaluate a property and compare it to other property's advertised rent prices of the same size and bath/bedrooms, do you discount it at all?  So what I am doing is looking on zillow, I see a house I might consider buying, I look at rentals in the same block, if there is a similar one that shows 1.2k for rent, plug 1.1k into my "numbers" sheet.  What discount is practical as a general rule of thumb?