Reply to $400K investment property with $2K monthly rent - worth to buy? How about the 1% Rule?

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[quote=bethesdawings]Thank you all for sharing your opinions! I really appreciate it!

We can pay cash to purchase investment property. However, many people said that we should leverage the money. Both my husband and I have stable incomes. It is not a problem for us to get mortgage loans. With the same amount of cash as downpays, we can purchase more properties. That’s why we are thinking about using leverage. I appreciate the insight of investing the money into mutual funds. It is all about diversity of the investment.

As a mortgage broker, I have seen quite a few people with 120+K annual income own 6+ rentals. Many rentals have mortgages, yet still generate positive cash flow. Hence, they can continuously use their W2 income to qualify for a new mortgage loan.  With the appreciation of investment property value, they built up a substantial amount of equity over years. Of course, the bottom line is to have positive cash flow? (Some even said that, initial negative cash flow is also doable, thinking about the paid off principle and the property value appreciation)

The reason our realtor recommended rental properties in VA is that VA is more landlord friendly.  I know many friends have rentals in MD. Realtor told me that in MD and DC, it is super hard to evict the renters and one might end up selling the property real cheap. Is that bad?

Please share your experience of where is a good place to get an investment property? Or it is simply a bad time to buy for now? Thanks!
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