The way the math works out, paying off a primary residence (and car loans, etc) will help your DTI more than paying off a rental.

1,125/mo rent = +13,500/yr-1,125 vacancy-1,350 repairs/capex (10%)-7,960 mortgage (110.5k @ 6%)= 3,335/yr remaining for taxes and insurance, or about 2.5%Are your taxes and insurance incredibly low in Savannah or did I miss something on my math?

Getting the math right is really important to ensure you get cash flow.Good luck as you begin!

If anyone wants to share their thoughts or check my math it would be much appreciated.

I've used the IRS capital gains exclusion to sell at PCS time when the appreciation provided me more future opportunities than trying to make the rental math work.

William, You need to do the full math, as @Peter M. mentioned and did for you, the percent rules are just for quick analysis like he said. the percentage will analysis people usually use to help tell them if they want to run the numbers further on the property because it fits a certain % criteria. that's OK but does not fit every situation, what if you know the area is an up and coming hot spot and even if the % number is off - because the incoming rent is below market and you know that they will be going up - then the percentage rule will tell you to walk away and you would miss out on a property that a full analysis from the beginning would tell you to jump on that property because you would know that the rents were below market and that they are going up. forget the percent rules, learn the area you want to invest in, you will learn what the area does, the rent it gets and how much would be a good amount to purchase for based on the amount of rent you can collect for that property.

Getting good at the math will ensure positive cash flow.As you learn you’ll start to narrow your focus.

Do the math again (make sure to shop around for a bank with lower fees) and see if there is a solution to increases the value of it in a short time, so you can refinance it later after get a new appraisal after  rehabe....No deal is batter than a bad deal which will stress you out and not worthy of the time and $.  

But the math works out and numbers don’t lie if you have factored in all your variables conservatively.

I am sure to make the math simple and to be conservative teachers use this 8% number.