Is this calculation correct?

[Byran Parson]

Tell me if my calculations make sense as im thinking about buying a 50k sfh rental. I buy house for 50k. put 10k down on it. 2.5k closing costs. 12.5 total cash investment. No immediate repairs needed. It will rent for 735. When following the 50% rule, it will cash flow around 60 dollars a month. That is 800 a year. So my return on investment would be: 800 cash flow yearly 3% property appreciation=1500 yearly principal paydown=600 yearly total yearly=2900 2900 divided by 12500 = .23 23 percent total return.

[Anthony Dooley]

@Byran Parson this is not a good deal. I will assume you are new, so I will try not to sound like a jerk. Don't Answer, but just ask yourself a few questions.

Do you think it is a good idea to invest $12,500 in hopes of getting $60 per month? 

Will it actually rent for $735? 

What if the renter doesn't pay? Can you afford to carry the cost of the property if vacant?

$60 per month would make you $600 in 10 months. Then the hot water heater goes out and it costs $700 to replace.

Please be aware that even if you made $100 per month of cash flow, you will never make any money from one house using this method. $100 per door works if you have 100 units and maybe even 50 units, but never just one. You need more cash flow Sir.