Updated 8 months ago on . Most recent reply
Evaluating established rental properties
I moved out of my first house about 11 years ago and have been renting it out ever since. At this point I have nearly paid off the mortgage entirely. I am gearing up to purchase another investment property which has made me re-evaluate how my current one is performing. My question is how do you evaluate the performance of an established rental house? I have been evaluating potential deals by looking at Cash-on-Cash return, among other things. But I'm not sure if cash on cash is a good metric when the home is paid off. For example, this is a $180k house, so unless I net roughly $18k per year (10%) it seems like I should be selling it to invest in the stock market. Am I missing something? Thanks for any insight.