Typical Payback Periods, 50% rule, and 2% rule

[Matt Richter]

Assuming 100% financing at 4 % and 50 % rule (50 % of gross rents go towards expenses) what are typical payback periods of real estate property?

For instance this property http://www.zillow.com/homedetails/5719-Golf-Hts-2-San-Antonio-TX-78244/2111931129_zpid/ Has a Zestimate of $910/mo and a Zestimate $97,835 if you take these values as given. I purchased the home for $97,835 receive a rent of $910/month usign the 50% rule I would have: (910*12) - (910*12*.5)= $5,460 per year or $455 as cash flow or to pay mortgage. Assumming 100% financing at 4% and using all money to pay mortgage I could pay off in 32 years (mortgage payment for 97,835 at 4% for 32 years equals ~ $455). How likely is it to have net operating income (in this case $455) equal to mortgage payments and at what specific payback pe riod (in this case 32 years)?

Side note on 2% Rule: Assuming 100% financing, 50% rule, and the 2% rule (buy property if market value for rents are 2% of the purchase price in other words offer 50 times what monthly rent you could bring in) applied to any property purchase would yield the follow payback periods for each interest rate:

@ 3% interest ~ 9.5 years

@ 4% interest ~ 10 years

@ 5% interest ~ 11 years

@ 6% interest ~ 12 years @ 7% interest ~ 13 years

Thank you for your input.