But is it reasonable to account for paydown when calculating return to compare to a stock market investment?

This allows me to compare a property that I'm looking at to similar properties (location, quality of finishes, size) in the area.

It helps that the units have luxury finishes compared to the others offered in the area and rent is only $200-250 above the average price.

If debt was included in the NOI, cap rates would be different for everyone (except cash buyers) depending on terms and DP.NOI doesn't include debt service or cap ex so we have a universal base to compare other properties to.

Does running the numbers mean looking at the potential sale price, and comparing that to Monthly expensesWhat class of home it isWhat class of environment is the dealPotential cash flow Running those numbers, and seeing if it is a potentially good deal, or am I completely misunderstanding this concept?

Find as many comparable homes in your market.Many - myself included - recommend a 5-5-5 strategy:5 homes currently listed on the market5 homes pending (under contract)5 homes recently soldIf you're not an agent, you may not have the ability to find homes currently under contract but you can at least look at what sold recently and what's currently active.

But her Rent even with high water bill still less than comparable houses in bad condition - she tried to find last August and nothing was that nice My point is: if you find a PM company you can TRUST, you'll have steady returns for years to come.That half month discount was most likely customary for the area but they didn't convey it to you.ps find another realtor to buy properties OOS......this is not a good deal ....IMHO

Dora you'd see how they compare. 

Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers.

They are all slapped with a higher property tax rate compare to what owner was paying in previous years.