The nice thing about rental income is that it is inflation adjusted.

So you can set aside the "present value" of the future tax and keep the rest for yourself.Additionally, the future tax rates could change, but inflation alone should outweigh any tax implication.

Keep in mind the rate of inflation as well, the money you spend today will most likely be stronger then the money you spend tomorrow.  

Our reserves sit in money market accounts, meaning we're losing money to inflation each year.

. $180/ month is sufficient for this type of house.The house was not that big.Over years, if rent increases based on inflation rate, that will easily cover the capex.

I first thought I might be able to use median new home prices for the area then adjust it for property taxes and inflation so that when I compare year over year it might be apples to apples.

Hello BPI wanted to share a success story in finding a great deal in an inflated market.  

We often refer to this as "adding value"(Incidentally, within the category of "market appreciation" it's easy to confuse 'appreciation' with 'inflation.'

(You cant put a new roof on a stock)Inflation and or property improvement justifies increasing the rents over time.Your rental income (and possibly w2 income) could be offset by depreciation.  

Could even have negative inflation adjusted appreciationUnder $50k is typically much more difficult to find financing onYou likely will need to scale up to a large portfolio before you really start to make significant profits (in terms of $s rather than %s)Less liquidity, meaning it will take longer and be harder to rent, refinance, or sell if you ever need or choose to.So, depending on how you weigh the pros and cons will depend on if it is good strategy for you personally.