At least as it relates to buying SFR's as cash flow vehicles.. you may want to think about small Multi because those will generally always sell for a cap rate if rents increase your value goes up... but you will hold value better in the mid west markets Brie may want to speak to that I think that is what she buys in small multi's  cash flow is better generally and values hold and sell at cash flow numbers. 

I believe that you would add that expense to management, ultimately lowering your NOI, then adjust purchase price based on Cap Rate you wish to obtain (or have already negotiated). 

below is a current project I am working on: Cap to Colonial Conversion 

It works out to be a 12.2% cap rate on a $120000 property.

What is the market cap rate?

Such as the money from cap. expense, maintenance, etc.  

Ran the numbers with property management, cap ex, vacancy, repairs, and maintenance and it cash flowed around $360.

I currently have one rental property in San Diego--a 3 bed 2 bath condo with a 10% cap rate (purchased in mid-2012).

There is a cap to how many loans you can have.

I figured insurance at $35 per month based on my agent's estimate on a simpler property and vacancy, cap ex, repairs at 7% each or $40 per month.