My analyses for vacancy rate are, rent to high and too many 2 bed room units for rent in town.

If market rate is $600 I'd be willing to do as low as $500 a side if that's something that they can afford and would keep good tenants in there and avoid the cost of months of rehab and vacancy.

After maintenance and vacancies, tax, insurance and expenses, you expect to make $600/month NOI from the rents

Student rentals are a bit higher when it comes to management but if you have a well maintained place for a reasonable price your vacancy will be 0% or very close and you will have signed leases 6 months ahead of the current one expiring.

The tenant ended up moving into another house I had nearby that just had a vacancy.

Ask them what neighborhoods the like to rent in, what home features they like in their rental properties to keep vacancy down, and what you can expect as far as cap rate.

Once you have about 20 properties, the vacancy rate among your portfolio of investments flattens out.

More power to you if you found one, but I wouldn't count on it.Here are the expenses as I see them:Mortgage Rate 5.00%Length of Mortgage in years 30Monthly Mortgage payment $592.65Taxes $233.33Sewer and Water $75.00Trash $75.00Heat/Utilities $25.00HOA $-Cap Ex and Ops $150.00Insurance $66.67Mgmt Fee $-Vacancy $120.00Total Expenses $1,337.65I like this place at 99k.

Target section 8 or other populations that are a bit more stable but not strong enough to move around.As you analyze low income, plan for higher vacancy rates (10%) and make sure the cash flow works out, because you can't count on much appreciation.

@Nick Payton , not sure if the 50% rule counts escrow as an after mortgage expense, but here is the breakdown:Mortgage payment: $388Escrow: $237total: $625Expenses:Utilities: $250Maintenance: $1075% vacancy: $70CapEx: $110total: $537We'll see how well those numbers match up with reality in the next few months or so, with these numbers my cash flow is closer to $250 a month than $300, guess I got too excited in my original post =).If Escrow counts towards expenses (taxes and insurance) then I meet the 50% rule for sure.