Since we launched the last year has been solid  - Since we have lived on the property it only would cost us around 50 extra a month for water and utilities from what we were already paying.

For instance, have you accounted for maintenance, CapEx reserves, taxes, insurance, water, trash, electric, gas and landscaping?

Assuming that you are interested in buy and hold, you will also need to include repairs, capital expenditures (CAPEX), vacancy, water/sewer (unless tenant is responsible), and property management.

Hi @David EpsteinYou will really enjoy Colorado Springs! 

In other words, while it's popular as hell just to use % of the topline to represent costs, most costs are actually fixed dollar amounts.Fir instance, replacing a water heater in a $900 rental costs the same thing as it does in a $500 rental.

If you're lucky enough to have a local builder with experience building passive houses, you may be able to build a house which requires almost zero supplementary heating and cooling, and it will have lower water bills as well.

I am surprised they are running out of hot water fast, the smaller tanks should heat the water faster than the larger 50 gallon tanks, maybe look into small tank heaters with more heating coils to heat the water even faster. take a look at this one, available from HD too https://www.rheem.com/product/marathon-30-gallon-e...that one may deliver enough hot water for your tenants.

You will always have a mortgage payment eventually, pay interest, insurance, water/sewer, save for your reserves such as vacancies, cap ex, and repairs, and of course, can't forget property management if you are not planning to manage them yourself.

A couple things to consider:The infrastructure was designed to support a specific development (number of parcels, certain square footage and/or water consumption). 

Kids are unbelievably disorganized and trying to get them to do everything they need to do to have cable, water, electricity and pay YOU on time is asking a lot!