5 signals I watch before buying any rental property
Most people overthink real estate. Here's what I actually look at before putting money down on a rental:
1. Cash-on-cash return above 8% ā If the numbers don't work on paper, they won't work in reality. I want my money earning more than the stock market average.
2. Population growth in the metro ā People moving in = demand for housing. I check Census data and job growth reports before anything else.
3. Rent-to-price ratio above 0.8% ā Quick filter. Monthly rent / purchase price. Below 0.8% and you're probably losing money after expenses.
4. Days on market trending down ā If homes are selling faster month over month, the market is tightening. Good for appreciation, good for exit strategy.
5. Local landlord-friendly laws ā Eviction timelines, rent control, tenant protections. The legal environment matters as much as the financials.
None of these alone are a green light. But when 4 out of 5 line up, I move fast.
I break down real deals using this framework inside Wealth Wire ā free to join.