Help a newbie understand - Rental Property Calculator

[Kenneth McKeown]

So I've been into REI for a little over a week and I thought I'd start just throwing in some numbers onto the calculator here on BP. Well, every single report I do gives me an awful return. I'm not sure if this is wrong numbers or what - so any advice would be awesome! Below is an example I just did in about 15 seconds... and I'll also attach the redfin. My biggest confusion is on the expenses... I know where to put property taxes because it states just how much it is - but the other expenses (totaled to be 655/month on redfin) I've just put in as "other monthly expenses". I've also assumed that I could get the property for 90k rather than 105k and that it would take 5k in rehabs and 3k in closing.

https://www.redfin.com/TX/San-Antonio/450-Tulane-Dr-78228/home/48896162

https://www.biggerpockets.com/buy_and_hold_results...

[Ali Boone]

Well the more obvious answer to what other people are saying is--most places the numbers don't actually work. San Antonio is more likely to work than a lot of cities in the US, but 80% or more of properties don't make good rental properties. People don't understand this. For example, I live in LA (way worse than San Antonio for numbers) and the numbers flat don't work out here for cash flow so I buy out-of-state. 

The two major locations that numbers won't work are: 1. much nicer neighborhoods or popular neighborhoods or whatever because prices are too high, and 2. cities/markets in general such as LA, NYC, San Fran, etc. but also smaller cities too like Phoenix or Seattle, etc. 

You should be able to find cash flow in San Antonio, albeit not extreme high levels of cash flow, but in very strategic areas (middle ground between the nicest most popular areas and the ghettos).

The good news is- it's not you. It's the location. Welcome to rental properties. :)