What is a good cash on cash return rate for rental properties?

[Jason Nguyen]

Hello guys,

I made a mistake a few years back when I bought my first rental property at $420k with 20% down. Rent is currently at $2300/month and mortgage at $2550/month. Which results in negative cash flow. I am still learning on how to build a rental portfolio, and it will be great if you could share with me some good info that I need to know before buying rentals. I am thinking about selling this rental property and start all over again.

NOTE: Cash-on-cash return means cash flow/total money invested right? it doesn't count the appreciation, tax benefit, or principal pays down right?

So my questions are:

What is a good cash-on-cash return?

Is investing out-of-state a good idea if my current market doesn't have a good cash-on-cash return rate?

What is a good way to buy a property under market value?

Do you take home appreciation into your consideration? For example, if a property goes up 4% each year with negative cash flow, is that still a good investment?

Thank you!