With so much debt involved - when do rentals finally pay off?

[Mo Farraj]

Hello BP Community,

I've been listening to podcasts, and reading all about rentals for the last 6 months. Now I had a quick question from all of my readings. What tells you a deal is worth your time? Looks like most of the community is after MFH. But what makes a deal worthwhile in your eyes? What scares me is how large a mortgage or money borrowed is as compared to the rent you charge for a property. For example, lets say I found a SFH that costs 200k after all renos, and I can rent it out for 1k/month. If I put 20% down and get a 160k loan, it would take me (160k/1k) 160 months or 13 years to pay off this loan. Now even with appreciation and increased rent inflow - it would still take above 10 years to pay off the loan/interest expenses. This does not seem ideal. Do you refinance all of your properties to increase cash flow? If you do not refinance, do you take on massive amount of debt and just collect the small difference between your investment property expenses and income until you fully pay off the loan? Do you have a certain criteria you looks for in regards to rent vs cost of home? Why wait 10 years for 1k per month as opposed to flipping a home and possibly making 20x?

 I appreciate your help!!!