This article goes into how to decide if a property is good rental unit. "Interest rates haven't been this low since the Flintstones first bought a house." and rental rates are incredibly high right now so it makes sense to be investing in property.
The formulas are a good starting point and seem easy but there is a lot of thought that goes into it beyond simple math. It is imperative to not overpay for units and management fees can add up. I love selling investments but you have to be careful to make wise decisions and not be blinded by surface level numbers.
Many of the best deals are lower priced units. Sometimes they are not gorgeous homes yet they are great investments so keep that in mind!
Read the article for more details but most importatly if you are considering this get with an agent that has a strong background in this!
Gross Rent Multiplier = (Selling price) / (Gross Annual Rental Income)
Capitalization Rate = (Net Operating Income) / (Total Investment)
Gross Rent Multiplier = (Selling price) / (Gross Annual Rental Income)
Capitalization Rate = (Net Operating Income) / (Total Investment)
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