If you are starting out with little cash reserves you may need draws very frequently and it can really cut in to your margins.

If you do those well by getting great property in amazing areas for the right price AND screen/find a great tenant who you train on your properties you can also cut down your work.Here are some of the things we do*Self Manage- Buy class A properties that attract professionals in great areas, smaller margin with almost 0% vacancy, no management cost and less expenses.

Your real-estate profits would be taxed at the applicable U.S. corporate tax rate; which is typically higher than a U.S.A. personal tax rate on U.S.A. residents, but frequently less than your personal marginal tax rate in Canada or the full Corporate income tax rate applied to passive income.  

We buy class A properties that need less management work but also have small margins.

So even with a full service firm there's still a big potential profit margin.

But , in this area, it seems the great deals (30% margin) are few and far between.  

This is a marginal wholesale deal.

Selfishly, what I get in return on something I feel aligned with far outweighs anything I can measure in cashflow or margin. 

Hi everyone,I am looking to start purchasing houses to rent in the near future and, currently, I am considering purchasing in Louisville, KY and wanted some feedback on the type of property to invest in.I was wondering what people experiences have been with starting in real estate investing by purchasing cheaper older houses expecting a higher turnover rate vs. spending a bit more and trying to find longer term tenants .I have thought of pros and cons of both but I am considering starting out with cheaper houses and eventually, after having several units, purchasing more expensive units to try to get more long term tenants.cheaper houses higher volume  pros:1) allow me to pay off the property sooner2) allow me to purchase more units faster3) Easier to afford if unit goes un-rentedcons1) higher maintenance costs due to age of house2) higher turnover rate for tenants due to proximity to college campus3) depending on property manager, turnover rate could drive up the cost of managementmore expensive, lower volume pros1) lower maintenance costs2) possibility of lower turnover if long term tenants are found3) nicer houses allowing higher rentcons1) would take longer to save up to purchase2) possibly more straining to pay mortgage if unit goes un-rented3) possibly lower profit margin due to higher mortgage payment I know there are many more pros and cons for both but those are the top 3 of each for me.

I guess it speaks to the over all health of the market when big operators margins slip so low they need to step to this level.