Deal Figures - Am I On Track?

[Brian Burton]

The subject is a short sale 3/2 1300 sq. ft. in a nice neighborhood a few blocks from the waterfront (Gulf of Mexico). Over 90% of the block is owner occupied by people who have been there 10+ years and the surrounding neighborhood appears the same. I have never rented a property or bought for investment but rentals seem strong (reasonable rent listings in the area are not lingering on the market for months at a time).

Asking price: 39,500
Estimate Value: 70-75k
Rent: 1000
MTG Payment ~ 400 with tax & insurance

I've noticed in the "Fly-by level" guide for newbies it recommends taking 50% of the rent for expenses then deducting your payments to make sure you have a positive cash flow. What expenses are these accounting for? I've owned a short sale fixer upper for 5 years and aside from major renovations I planned on when I bought, I've never had to spend that much for upkeep.

The deal seems like it's worth the effort to me provided the typical house buying stars align. Am I missing important considerations? Can anyone recommend a good book for brand new people who are interested in buying & renting a single family home? The renting part is what's causing me more concern & nerves than anything.

I have some more details but I don't want to go overboard - this is my first post.