The price-to-rent ratio is also low.  

The only additional thing that needs to happen is make sure appraiser makes note of why the value increase in as is vs previous purchase price.

So your super basic P&L may look like: $30,000 Rents-$3,000 insurance expense -$9,000 interest-$3,000 taxes-$8,000 operating expenses-$14,000 depreciation ----------------$7,000 loss on paper for the year  so negative taxable income But remember- $14k of that (depreciation) was something we didn't actually spend money on- so cash in bank at year end would be $7,000. 

Charge market rent. 

I have found that they worked really well when it comes to getting better tenants and better rents, and having less hassle, less headaches, and then getting a higher sales price; without paying closing costs or realtor fees.

Yearly increasing costs will, in time, eat up any profit they have per unit.

But once I got the bills, I increased the rent with the tenant's approval and signed an addendum to the lease stating the rent increase would be X and the owner would take over utilities.

.- Over a 10 year period cashflow will increase as rents increase (rents typically rise faster than property taxes, insurance, etc.)- The property should be appreciating, if purchased in a good location, increasing the owner's equity/wealth.- Rents will be paying the mortgage off, increasing the owner's equity/wealth.- If you hold a rental until death, you can pass it on with a stepped-up cost basis, limiting captial gains if then sold (limited by inheritance tax limitations).Too many newbies on this site trying to replace their day job income via "passive" real estate investing w/o digging deep enough to understand how it really works.

The shorter the prepayment term has an impact on increasing the rate.4.

I never saw the unpaid rent (and knew that I wouldn't).