ROI Low- getting cold feet

[Laura Granelli]

Hello all, I’m new here but have been listening to podcasts for a while. Husband and I have been looking for an investment property to rent. We recently found a very small house and offered in haste. We ran the numbers based on our agents rental income assumptions and numbers worked though low ROI. Our agent said there were multiple offers and they want highest and best by 5 PM. We offered thinking there was a 90% chance we would not get it and of course they accepted. We have a home inspection scheduled for the morning. Should we go through with it or just try to back out? The ROI is between 1-3% though that’s basically the outcome for most homes in our area.

[Ben Leybovich]

So which is it - 1% or 3%? And did you remember that inflation is 2%, thus 1% would cost you money :)

On a cash flow basis, anything under 8 is going to hurt. Are you banking on a lot o appreciation, or what?

And here's the question - if you are looking at 3% return (although I am not at all clear what that means), why even bother?! Tenants, leaky toilets, landlord/tenant laws, debt, etc. all for 3%?!

Why not sell something on Amazon and call it a day...:)