Also include a vacancy factor.

I'm not yet experienced in rural renting I'll admit, but my strategy to circumvent lack of a robust tenant market is to factor in more vacancy into my numbers.

If he's making 500/month, and he never has a vacancy or expense, he will make $6k a year.  

Vacancies are longer, broker fees to fill spaces are higher, and tenant concessions can be large so higher reserves are needed.

Some only cash flow about $125 per month so if I have really 1 maintenance item I am at break even or zero cash flow and if I have more then 1 vacancy I am nervous.  

What is the current rent roll not rent income how many vacancies, and what is the adverse market rent for the units in your area.  

I thought the owner might be interested in a buyout with some cash up front & monthly cash flow with no tenants, toilets & code enforcement.I also considered offering the offending tenant a cash incentive to move, which in the long run would be cheaper than a $800 vacancy in one or both of our units.Thanks for the comments.

Excluding vacancy, maintenance, and PM you're at ~14.5%.

That's not including vacancies and property management (or paying for your time spent)

I aim for 20% cash on cash return excluding vacancy and maintenance AND 5-10% equity remaining (all in vs.