Apartment and Rental Properties - New Investor needs direction

Hello, I was wondering if anyone could help me with an estimate of what kind of income is possible when you rent out a few homes you've already bought and paid off.. Specifically, my question is this. If I were to buy 3 homes and pay them off up front, then rent them out while they gain interest, how much taxes and profit can I exect to make? I see alot of advice on here for investment properties that involve mortages, but if I pay it off first I will make alot more monthly, correct?
I'm thinking houses in the 150,000-200,000 range. i would rent them for 1,500-2,000 a month, and I have plenty of money to pay for professionals to do any repairs, but i will do some of the smaller jobs myself. I plan to rent them out for about 5 years then sell them, how much can I expect for a return? I live in Jacksonville Florida if this helps.. Please, if anyone can help i'd appreciate it.. I just want an estimation, even if its not so close, i could atleast have some idea of what I can expect. Another thing I was thinking of buying and renting are business condos/strip malls whatever you call them. i think they would always make their rent on time, for the most part. does anyone have any experience in this area? thanks for ANY advice.
~Aaron

No way to specifically answer your question, there are just too many variables involved. In general, you should be able to make money with no mortgage payment (about 60% of what we take in from rent goes back out to pay the mortgage). How much? Can't say. You will generally make more money with more units on a lot - duplexes are a better return than single family homes, four unit buildings better than duplexes, etc. This is because your income is coming from more than one place, so it is easier to cover costs and make a profit. Also, whether the buildings are new or old make a significant difference in what your costs will be and newer units are generally easier to rent. You also have to look at your market - will it support single family homes at $1500-2000 per month or are they going to be sitting empty on you?

i would say ultimitely it comes down to the tenant selection process and simple luck as to weather you can make decent money. on paper buying a house for 150k and renting for say 1500 per pays it off in roughly 9 years then you start really cashing in. thats assuming the house needs nothing in that time and the tenants arent bad and its always rented and its actually worth 1500 per month. i bought one of my rentals for 85,000 and rented it for 750 so i was making maybe 100 a month. the last set of tenants checked out fine but once they got in the house they started breeding and all my problems came to light. in the end i got them out in court after 6 months of no rent and about 9k in legal fees (everything for tenants is free court wise but ll get hit hard and the tenants can just keep making stuff up costing you more money and them none.) the house suffered 49k in damages and is totally unliveable. so basically one bad tenant cost me a grand total of 58k (its still rising, the house has been sitting for about 3 months now while im making repairs but im not even counting that. probably another 5-7k in carrying costs while the house is vacant and being repaired). they basically made it so that house will never be profitable and take a few decades to pay back what they did. in my case is sounded good, looked good, and was good for a while but i never figured anyone could do that to anything or anyone. my general thinking has switched from if i but this house and rent for this amount i can make this much per month too i buy this house for this much and i pay this much to retain a lawyer and i keep this much set aside for problems and a little more over here for carrying costs and some here to pay inspections (i now have the board of health and fire department make yearly checks on my dime to prevent bad tenents from doing to me and causing more legal issues) and then i can figure monthly income and break even point. id listen to mitch too. the more units you have in building the more they can soak up one or two bad tenants while still generating profit. its when you have one unit by itself not producing and possibly losing that you run into real problems. youve also got to think of the tax issues with owning the house out right. gov takes a huge bite out of you if you dont have any write offs on the income property. sometimes a loan is a better idea as long as it maximizes your deductable. sorry for being so synical, they made me that way.

You're well on your way to going BROKE. Too many people think that the 1% rule will make them money. It won't. You need a lot closer to 2% (of the value of the property per month in rent) to make a profit.

It's not just the cost of the mortgage, you have to allow for; vacancies, repairs, maintenance, insurance, taxes (not a small deal in FL) and a host of other things.

BTW, I've been an investor for 30 years, and have bought and sold close to 100 properties and owned as many as 16 rentals at one time. I started out thinking like you, but changed my mind after a very short time in the business.

Try googling and finding some RE investment web sites.

frank

Might look at some good REIT s some have a good pay back

You have over a half million in cash ?? !!! You need to talk with a TRUSTED finiancial advisor/planner before you do anything. (and they are hard to find). If you are just itching to be a land lord, find a little duplex close to you and see how you like the job first. As the others say, it aint no put it on auto pilot and watch your money grow. Tennants, Toilets & Trash!!