So here's a silly question - how do LLs make money renting SFHs? Seriously, I don't see it in the numbers. Unless it is used as a sort of retirement plan, and the benefit is dependent exclusively on a significant increase in equity over time, it's not making sense to me. Pulling a house off Zillow, a $200,000 house, with 20% down, will have a mortgage of $1074/mo. But Zillow gives an estimated rental cost of $1250/mo. At that rate, you would be lucky to earn back your down payment before you die, forgetting about ever making a profit from rent. So, unless you can get a house significantly below market value, or pay cash for it, I don't see how money can be made. What am I missing? --74.96.xxx.xx

All are ways to make money in real estate. --24.125.xxx.xxx

You're running #'s on the wrong house. --50.32.xxx.xxx

What NE said. --70.178.x.xx

And a lot more.... --68.10.xxx.x

One roof, one foundation, need as many units as possible under that one roof. Why would anyone just buy one unit under one roof. --108.20.xxx.xxx

Bet: math --50.32.xxx.xxx

I am getting $1,100 a month for a house I paid $72,000 for...so not sure I'd trust the Zillow info. --99.92.xxx.xxx

Every market is different. Research other houses and regions for better deals. I could buy all day long $65k houses that rents for $750. That’s not even a deal...just retail. --107.10.x.xxx

Another the first rent was $600 and today it is $2850. --10.0.xxx.xx

Like NE of PA says its the wrong house. You need to continue to look for the right house. And be patience and you will find it. --99.56.xx.xx

Patch, you got to know how to buy houses right. I didn’t know this when I bought my first house 15 years ago, so I was only clearing $250! A month the first year. I quickly figured it out. The next few houses I bought I paid cash, ( borrowed from dad ) all around 70-75 k, I instantly refinanced out at 91 days, effectively getting a 100 percent loan. I ended up with many houses that I had 0 cost in. Those houses I began clearing about $400. After several years I had enough cash to buy one or two a year for cash. Those houses I was clearing $1000 per month . I haven’t had a job myself since prior to buying the first rental, my wife retired in her 40s , 4 years ago. Now we are clearing on rentals in a couple months , what normal working folk make in a year. So yes. One can make money on rentals. --75.141.xxx.xxx

Study your area closely, the example you gave will surely not work - but many of us have printing presses in the basement of the empty places! Just kidding... --76.188.xxx.xx

I had this question myself at one point and that extended to duplexes as well. I didn't see how folks could make money so I focused on MFH. Many folks here own SFH's and it's been an education for me--so much so that I've been tempted to pick a few of them up. I've not pulled the trigger though and have stayed in the MFH realm. Like others have said, it's all about the numbers. In my area there are SFH's one can pick up for $ 50K and rent for $ 900+ a month. If you're not leveraged, that will net you $ 500+ a month. I would avoid being leveraged on that sort of purchase if I could. There's no one way to go about this. It gets down to how one prefers to do it. My preference is MFH mainly because that's more efficient for me from a management standpoint. --209.122.xx.xxx

Otherwise you are right. Landlords wouldn't make money or they'd have to charge so much in rent people would just buy. --107.5.xxx.xx

You need a class in financing. --99.59.x.xxx

--96.46.xxx.xx

Instead of $1250/mo income like your example... $7500/mo. --98.93.xx.xxx

You don't buy a 200 K house. My dad bought his first duplex for very little as it had a fire and he fixed it up. Other duplexes were from people trying to flee the neighborhood. One was from a son in law whose wife had died and the mother in law lived upstairs. Two fourplexes were from people who couldn't make it work and didn't know how to make improvements. One was from a widow who wanted to move elsewhere. --73.178.xxx.xx

Bought one yesterday sfh 3 bed 1 bath 60k. Need about 3k to fix. Will go for 800 a month.. 115 taxes. 45 insurance. Positive cash 640.. House will be worth around 75k. Even if used a loc at 5% that would be around 250 a month in interest.. Still making about 400 a month.. --107.77.xxx.x

As a disclaimer...that was one of my better deals --98.93.xx.xxx

There are few areas of MD where using an FMV 200k home is going to be a good rental. You can buy a fixer and build in your sweat equity. Time takes care of some marginal investments. However there aren't too many areas of MD where single family homes rent for 1250. Don't pay much attention to zillow. --174.204.x.xxx

--68.50.xxx.xxx

Learn how to buy houses for $5K. It is not as difficult as you may think it is. --68.63.xxx.xxx

Portland/multnomah county property taxes = noooo way to find great deals. Gotta be from $$$ out of USA to score here. --172.58.xx.xxx

Right now, prices are back in a bubble so we are not buying, we are concentrating on keeping existing units maintained and updated so that we can command as much rent as possible. But the deals are still out there if we were really looking. --50.82.xxx.xx

Every class of rentals has its pluses and minuses. The people who make money figure out how to make the income more than the outgo. The people who don't figure that out go broke and I buy their houses cheap....which is one way I make money on SFHs. --173.19.x.xxx

So you work hard for 15 to 20 years, never make a dime on these things and what happens now? Suddenly they are owned mortgage free, they are generating income which you don't work too hard for, and they are worth double what you paid for them. --192.203.xx.xxx

My two multis were cash cows. Figure the maintenance on one heater rather than four for example. It's all about tenant selection and management skills and being nice to people. Some folks just don't see tenants as customers or clients. Snobbery has no place in landlording. --73.178.xxx.xx

In my opinion, betting on future house appreciation is a fools game. Positive monthly cash flow should be your number one priority. --68.63.xxx.xxx

Back when we were buying a lot and fast we bought on the 1% percent rule and that is what Brad mentioned. But I still like the many units under one roof. Our two families are pulling in $2300 a month, bought at then $180k. So you could get a single for $90k and rent out for $1150, but now you have 2 roofs/foundation/siding/landscape etc to deal with instead of one. When the market hit rock bottom in 2008 to 2010 you could buy at 2% rule but those were scary times when every other house in the city was boarded up. Hard to believe we have come so far from that now where a lot of house are for sale and selling and not making anywhere near the 1% rule. --108.20.xxx.xxx

Nobody has a printing press? to make money - hehe --76.188.xxx.xx

--99.103.xxx.xxx

More about cost per unit ? --99.203.xx.xxx

plenty MO that's short sighted for the R/E game. In 7 years no one will care about your cost per unit. --99.103.xxx.xxx

So in short, from a $18,000 down payment to a resale value of $600,000 with $2,500 a month renal income isn't bad, if you have 40 years of time ahead of you... --47.156.xx.xx

you are making wrong suppositions and also not buying right. my sfh houses are cash cows. then again I am in a college town. would I buy house in detroit...heck no. will I buy another hse where I am. heck yes. I look at long term cash on cash. don’t go by Zillow. go by your own roi. --70.119.xxx.xxx

Robert J are You able to find locally any good deals? With the actual prices, it is just a waiting game ... Waiting till next recession, and be ready to buy them --162.119.xxx.xx

Patches,It is a time thing.Don't pay too much attention to Zillow,just common sense and persistence. And being able to dicker,and not being afraid to get your hands dirty.If you can do some of the work yourself it also helps.for what its worth,I immigrated here with £20 in my waistband,wouldn't trust the pockets.the £20 is almost gone,so will have to try something different soon..........charlie.............. --174.199.xx.xxx

patches,don't be too quick to believe Vee,even though he doesn't admit to having a printing press.He just might.He's cagy..........charlie...................................... --174.199.xx.xxx

Thank you everyone. A wealth of information from decades of land lording, and very inspiring. --71.163.xx.xxx

I've heard strong debates from both sides and this is one of them! If you pick your niche and build on that you will be successful. That's the beauty of the real estate business --107.77.xxx.xx

Either they just use them as a place to park cash and are OK with a low but steady return, or they lose money. A lot of them break even or lose money every year. My aunt and uncle fall into this category, they own two SFH as rentals and lose money every year on both. --24.45.xxx.xxx