Picking a rental market

[Patrick Rabalais]

Looking for just some general advise here: I how

much is too much for a rental property?

Let’s assume I’ve found two places that hits 1% or very close to it. Do you want to go after the 180k property in an “up and coming” area or the 260k property in the established market with better schools and infrastructure.

For those of us who operate better with tangibles; I’m looking between the East Dallas- Ft. Worth markets vs the Plano/Frisco areas.

[Joe Villeneuve]

In order to answer your question you need to give us the numbers that matter...and not the 1%, property cost (incompete) numbers and the "phrase up and coming area".

Here are the numbers that do matter:
1 - Cost to buy (I said above your statement was incomplete)
2 - Down Payment
3 - Financing terms
4 - Monthly costs (insurance, taxes, etc...)
5 - Possible rents.

Once you've gathered the "exact" numbers above (not estimates and/or ranges) use the following formulas to get to your answer:

A - Cost to Buy - Down Payment = Mortgage Amount
    Then use mortgage calculator to get the mortgage payment based on terms of the mortgage (# years and interest rate)

B - Monthly Rent - Monthly insurance cost - monthly taxes - monthly mortgage payment = cash flow

C -       Down Payment          = # years to recover your cost (Down Payment)
     12(monthly payment)

The least amount of years to recover your cost is usually the best.