Posted by phil fernandez on December 24, 2000 at 08:48:04:
I wouldn’t say there is a strict percentage formula to use when you buy and hold properties as rentals. Each individual will have his or her own game plan.
The way I look at a rental property that I want to hold is how it will fit into my total long term plan. Is it in a good neighborhood. Will it continue to increase in value due to location, nearby employment opportunities, good school and hospital facilities nearby, etc etc.
Will this particular property fit into my plan. If it does I buy it, rent it and hold onto it. Now I’ve just acquired another piece of the puzzle. Continue doing this over time you will have a cash flow machine. I’ve been building mine for 20 years and I’m continually adding a piece here and a piece there.