Because the shelf life of most furnishings is 1-3 years, and because you'll almost certainly give them away if you sell the home (i.e., they add no permanent value, and it's very much the norm for the buyer to not pay more or separately for them), I believe you need to have enough cashflow to earn back the furnishings spend in a year.

And like all real estate, the more stable the asset, the lower your yields will be.  

Define your investment goals, familiarize yourself with related terms, evaluate your financial situation, begin small, investigate markets, establish investment standards, cultivate professional connections, carry out exhaustive due diligence, investigate funding alternatives, and determine whether to manage the property on your own or by hiring a property management company.Decide what you want to achieve—stable cash flow, long-term growth, tax advantages, or all of these—and dedicate some time to learning about them by reading books, using the internet, taking classes, and attending seminars.

Hi Jagger-Great question.I am a fellow Michigander from Ann Arbor.Nothing against Maine but the Midwest has seen some of the strongest rent growth in the country.When I consult with my clients, if they don't have the budget for a market like Ann Arbor, I direct them to Lansing, MI.The cashflow is strong, the economy is stable, it is the State capital so there is always economic development creating new jobs, the price point is relatively affordable because the cost of living is lower there, and appreciation is predictably linear.I also advise investors to buy duplexes and up so you always have a rent check coming in most of the time if you have a vacancy.

I have an investment thats been stable. has not required much upkeeptwo years iv owned it without much difficulty finding renters hvac, roof without issues so far but are on the back end of expected life.  

Ideally, you want a stable and/or growing population and low unemployment.

Canton & Akron both have affordable housing prices and relatively stable rental markets.

Also factor in the stress of doing a rehab / finding a deal as well as the stable income (as long as you know you have good tenants right now). 

On the other hand, if cap rates remain stable and you sell at a 5 cap, you'll be ecstatic because you'll blow through your projections and post all over BP what a great deal you just did and why you are the best investor that ever lived.Now let's say that you underwrite to a 5% exit cap and you are satisfied with the forecasted performance. 

This market has low equity appreciation, a dearth of multi-family homes, but a stable renter's market.