You get a Capitalization Rate (CAP Rate), which equals your annualized return by dividing the Net Operating Income (you had gross in your narrative) by the purchase price.

This idea that everything goes up in price is completely fictional.

I'd definitely get an average priced property (something that is a starter home) in a good area. 

Purchase price: $45,000 Cash invested: $45,000 Single family buy & holdHey @Malcolm Grundy!

I have never been disappointed and have actually thought he pays an extreme amount of attention to my needs for the price he charges.

If it concerns you that much, adjust the purchase price to take into account this added risk. 

That said most folks have price targets and if large complexes are conceding 1 or 2 months on the 1st year lease, itll put downward pressure on your rent to some degree. 

Purchase price: $839,000 Cash invested: $83,900Bought an up/down duplex 4 blocks south of Sloan Lake.

Purchase price: $165,000 Cash invested: $35,000 That's right.

Purchase price: $275,000 Cash invested: $45,000 Sale price: $400,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.