There are a number of posts here that deal with the real expenses associated with a rental. Search for " 50% rule" . There are many more expenses than just the taxes and insurance that are usually included in your payment. A common rule of thumb is that all expenses, including taxes, insurance, utilities (at least when its vacant) vacancy, advertising, tenant screening, maintenance, property management, tenant damage, legal fees, etc., all add up to about 50% of the rent. I've heard percentages as low as 33%. If you want to be conservative about the deal, use the higher number.
Then, cash flow = rent - expenses - P&I payment. Is that really a positive number?
You often hear a statement like " this cash flows" meaning the rent is higher than the PITI payment. That ignores the many additional expenses, but is often stated. Especially by people who have a vested interest in you buying something.
Some expenses, like new roofs, new furnaces, or major tenant damage only happen once in a great while (hopefully). Nevertheless, over the long term they do happen. If you are only getting $200/month after the PITI payment, you're not really setting anything aside for these expenses. A new $4000 furnace will wipe out 20 months of " cash flow" .
A duplex you could buy for $50K and rent for $1300 total would likely be a good deal. A duplex you buy for $80K that rents for $1000 is probably, at best, a very marginal deal.
