The 1% rule in Europe

[Oliver Kopun]

Hi,

I'm a new member from Slovakia (tiny county in central Europe).

I've been an enthousiastic subscriber of the BP Podcast for a few months now. I'm absorbing knowledge like a sponge while working towards a first deal, but whenever I do my own calculations I get very disapointed.

For example : I came across examples of people owning units which value $140K with an monthly mortage payment of $600 and are renting these units for $1340/month. Sounds great right ?

In my area the rent/value-ratio is much, much lower...

For example an average flat in my hometown (Spa town with 30 000 inhabitants) is around 700 - 900 sq ft. Average price for such a flat is around $130 000. The rent? Aproximately $600 if you are lucky. 

The houses start at around $200 000 but it's worth noting those don't usually rent. I've noticed it's super uncommon not only in Slovakia but in Europe to rent a house. It just doesn't make sense to pay $1000+ rent if you can get a much cheaper loan. Usually young couples/people rent a flat until they can afford to buy themselves a house.

In our Capital city, Bratislava the % is pretty much the same - around 0,5%.

Is it that hard to get appoved for a loan in the US?

Any comments on my thoughts? 

I would love to invest in rentals but is it even possible to be cash flow positive in such a market?

Thank you very much in advance, 

Oliver