50% rule

[Bryan P.]

MikeOH and some others talk about this 50% rule. I just bought my first rental property for 22,000. When I add up all of my expenses (tax, insurance, mortgage payment), I come up with 78% expenses compared to gross rents. Your first response might be that I paid too much for the property, but 22,000 was a cheap buy (dont know how I could get a cheaper place) and the rent is 600 which is above average for this area. I don't understand how 50% would work. I would have to be charging 800 rent which seems outrageous.

-Bryan