One way to quickly evaluate a rental property investment is is to calculate the percentage down needed in order to make the property’s monthly mortgage service(including taxes, insurance, and PMI if any) equal to the monthly rental income. The higher the percentage down required, the less interesting the property is as an investment.

The hardest part about this back of the envelope calculation is acquiring the rental market knowledge necessary to accurately estimate the probable rental income for a property. To find this information, check out craigslist.org, grab local papers, or contact local brokers to ask them about similar units that they may have on the market.

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