Amazon is branching into real estate through a partnership with Realogy, the nation’s biggest residential real estate broker, the company announced Tuesday.

How can you invest into real estate if a property costs 100k but the monthly rent is only around $350?

You could…but only if you buy it cash, manage it yourself, and have to put all the rent into a savings account for future maintenance, repairs and vacancy.

The rent needs to be able to:

  • cover the debt service (principal and interest)
  • cover taxes and insurance
  • cover future vacancy, future repairs, future capital expenses (a rainy day fund).
  • cover any other miscellaneous expenses.
  • and what’s left over can be treated as profit (you keep)

Typically the monthly rent needs to be at least 1% of the total purchase cost to support all this, but you need to run the numbers on each one.

The property you’re describing would not be a good deal to me.