If I am buying a rental property that rents out for about 1.5% of the total price a month, is that a good deal? I did the math and if I paid cash I’d get my money back in about 6 years assuming rent does not get raised (just assume section 8 stable rent for numbers reasons). Based on this info how sound is the investment?

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Sounds really suspect with that high a cap rate. I bet you there's some hidden gotcha you just may not be aware of that would negatively affect your profitability. Like is it in a very low income area with tenants who will destroy the property and minimal price appreciation? You better screen those tenants hard. Even finding 1% is hard with rates and prices so high these days. Get the rent verified ( anyone can make up numbers). Is the house about to collapse or does it have some other major undisclosed damage to it?

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Usually that’s a good deal.

That being said, make sure you run the numbers on all costs. If the property needs major work (roof / HVAC / plumbing needing major overhaul, sub flooring deteriorating, etc.), or has high insurance costs (in a flood plain, in an area recently hit by wild fires, etc…), it may not be as good of a deal as you are expecting.

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Well said, i remember selling the 2 property i had because i spent more than i earn from the rent, in 2 years add just 6 months rent and all, irather invest the money in short term crypto digital trading

Prior to Covid, the advice I got was alway look for at least 1% (monthly rent to total home value). It was and I think still is a really quick rutile of thumb to give you a sense of your liquidity if you buy the property. That said, you should buy a property kits because the numbers work on paper, especially since most people project cash flows as if everything always goes perfectly. Do some quantitative analysis. Like others mentioned, is this place in a terrible neighborhood, any upcoming major repairs, ect.

While I agree with others that these numbers aren’t the norm, this is what you should strive to see on paper before looking further into the properties. I personally like to see 1.25 - 1.5% monthly rent to price before touring the properties and making offers. Having a higher standard than most will help you weed out less desirable properties and help you make better deals.

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Dealcheck.io

Yes

That is way above the standard

No that's not a good return , even crypto traders get 10% above on each trading

Everything is location specific. a 5% CoC deal in San Diego is great, but not in Tucson.

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