Originally posted by @Mike D'Arrigo:
Not only is @Jay Hinrichs ........ It's also a myth that these cheap properties cash flow better than better class assets. You may get lucky and get a higher CoC return but it's mathematically impossible to squeeze more cash flow out of $600 rent than $900. The higher the rent, the higher the cash flow. It's basic math.
Not trying to be snarky but "The higher the rent, the higher the cash flow. It's basic math." isn't cash flow dependent on expenses? Now, it might be said, that lower class assets have more expenses in the long term. However, assuming you own the house free and clear like @ashley hamilton, you've done a fairly decent rehab, you manage them yourself or have a good property manager, thus keeping your expenses low over the next 5 years, do rent rates really matter?
Seams like expenses are the more important factor to look at.
Of course, if you throw up the same scenario with a higher class property with a higher rent than, yes, the cash flow would be better.
