How important is Rate of Return

[Ryan Baker]

I'm currently looking for my first rental property in the Sarasota/Bradenton (particularly Bradenton due to costs) area. I've been searching through the MLS for 2/2 or 3/2, 1100-1400 square foot properties in the $120-150K price range. What I seem to be finding is rental rates of about 1400-1600 a month for this type of property. This tends to create a Cash return of about 5-7%, and cash flow 150-200 a month. My question is: if you're getting your desired cash flow, who cares what your CoC or Cap rates are? Is it completely ridiculous to consider buying something like this? I've heard multiple versions of "criteria" involving similar requirements for SFH, which require cash flows of $100-200 a month on various podcasts and posts. So if this criteria is met, does it really matter what the return is on a SFH rental?