It states that 50% of the rent on average over the long term will be eatten up by expenses, such as tax, insurance, property management, vacancy, capex, etc.

If you post all of the following items here, I'll post an evaluation of hold vs sell from my perspective.TaxesSewer and Water (generally paid by tenant)Trash (generally paid/dealt with by tenant)Heat/Utilities (generally paid by tenant)HOA (probably not applicable)Cap Ex and Ops (my personal minimum is $150/roof/month)InsuranceMgmt Fee - as a % (general consensus here on BP is 10%. include it even if you think you are going to self manage)Vacancy- as a %. (8% represents 1 vacant month/unit/year)

What about vacancy, legal and eviction fees, CapEX, maintenance, taxes and insurance to name a few.

I have been listening to the podcasts and browsing the site for a month or so and am impressed with level of knowledge and the culture of the community here on BP.Being from north of the border I do get jealous when I hear some of the prices available in some markets of the U.S. but I do keep reminding myself to be happy with the raging economy and 1% vacancies of my home town in Edmonton.

Go through the numbers, account for vacancies, maintenance, and property management fees, and make sure you cash flow.

This leaves you cash for repairs/upgrades/vacancies or better yet, another rental!

We have found buying more expensive class A property while having smaller margins have allowed us to do very well because our vacancy, management fees and repairs fees are very low.

I am using 10% vacancy, 10% annual repairs, and 10% property management. 

NOI and x% rule are nice but they are all approximations to test your assumptions but in the end, your requirements and what you bring to the table are different than everyone else.Figure out what you want for an annual vacancy rate... say 5%. then compute your income.

What I'm planning on offering: $220kDown Pmt 5% = $11kExpenses (monthly): Monthly P&I = $1,059Hazard Ins: $100Mortgage Ins: $117County Taxes: $112Water/Sewer: $220 (high range for the past year according to water company)Vacancy: $257.5 (10% monthly rents)Repairs: $129 (5% monthly rents)Other: $25 (buffer)Total Expenses (including P&I) = $2,019Misc Closing Costs: $3,000 (guess)I'm calculating the following: Monthly Cash Flow (income less expenses): $55650% Rule: $228 cash flow ~ $57 per doorCap Rate: 8.8%Cash on Cash ROI: 20% (using 50% rule for annual cash flowRent as a percent of purchase price: Approx 1.2%Debt Service Coverage: 1.5What are your thoughts?