Oklahoma Rental Returns

[Ryan M.]

To those investing in rentals in OKC and surrounding areas... What kind of returns do you look for on your property using measurements such as cash on cash return, total return on investment, net monthly cash flow, etc. How much do your requirements change if offered seller financing vs traditional 30 yr mortgage?

I've seen a wide range of criteria on the forums and know it really depends on the location. Was curious to see what was typical in Oklahoma.

[Deborah Burian]

Strangely, we do an actual evaluation of the property and expenses rather than relying on a 'rule.' In Oklahoma it's easy to know the taxes, figure out the insurance and we have an excellent sense of expenses from years of experience... So - while we account for the various items allowed for in the 50% rule, we just do the math on each property we are at all serious about.

One issue I have with that particular rule of thumb is that we do conventional 80/20 financing with 15 year amortization. Our mortgage is going to be different than either the no-cash-down folks or those who use a more traditional 30 year am, not to mention all the other options that are out there. It's not hard to do the math - takes me about 20 minutes and that's if I have complex repairs to account for.