My first rental property opportunity- feedback wanted

[Kristen Moore]

I went to check out my first rental property opportunity today.  It's a 3 bedroom, 2 bath house built above several garages that I would also get the income from renting out. The property was built in 2004, and the same family has been renting the house since it was built. They plan on staying in the home, so I would not have to worry about getting new tenants. The house rents for $975 a month and the 4 garages are rented out already for an extra $200 a month.

I ran the numbers using a performa spreadsheet and would only have a monthly net cash flow of about $116-$137 (after expenses), if I get the property for 145,000 and have a 30 year mortgage. The property is assessed at just over 169,000, and I wouldn't have any initial rehab costs. The $116 - $137 monthly cash flow would be without having a property management company and with no vacancy accounted in because I already have a renter, and there has never been a vacancy since the property was built in 2004. I know that I should account for a vacancy though at some point. Is there a net cash flow that you would recommend making sure to stay above? I know it comes down to comfort level and that cash flow will eventually increase as the mortgage goes down, but I wasn't sure if there is a general rule of thumb for that to go by? The cash on cash return would be about 5%.

I have even thought about going in on it with someone else, but I would think that the cash flow would need to be a fair amount higher for that to be worthwhile. The nice part about that would be not having to put as much cash out and splitting repairs.  

I'd appreciate any suggestions or feedback that you can give me.  Thank-you!