How you make very serious money from rental properties is as follows: Buy single family detached homes in a location as close in as you can afford, spend money on maintaining them to attract high quality tenants, and hold them for at least 20 years, if not longer. Typically, you'll have negative cash flow for the first seven years or so, but the gains you'll make when you sell will be partially tax sheltered and far more tnat the sum total of your losses. Since 1945, this has been a sure-fire way to make lots of money.
Most properties that come with owner financing or rent-with-option-to-purchase tend to be overpriced - if they were priced correctly, most of them would sell as a traditional standard sale. One needs to be very careful when it comes to owner financing.
Of course, the question was asked by master of the trade so we have nothing to worry about :-)
Obviously, there's the question of rental income as Vivianne touches on. And as you know, while there's a general relationship between the price of a property and what it'll rent for, there are a lot of variations, too.
Then there's the question of financing. I'm guessing you're assuming conventional financing. But you can make your money go a lot farther with creative financing. Owner financing, for example. Or option a property rather than buying it. With your numbers, lease-option that $275,000 property for maybe $1,400 a month, then lease-option it to a tenant-buyer for $1,750 a month.
Then there's the question of what your ultimate goal is: Cash flow? Appreciation? A combination of both? There are some areas where properties will cash flow but appreciation may not be as good. Other areas (such as Ashburn) you might get better appreciation over the long term, but not have the cash flow.
Then there's the question of buying a good value. Would you rather buy two properties at $275,000 each with a fair market value of $550,000, or a $550,000 property with a fair market value of $700,000?
Two suggestions: One of the posters active on Trulia is Dp2--a real estate investor in Virginia. He's very good--get his feedback. And there are plenty of agents in Northern Virginia who know investing. Try Darren Marquardt with Long & Foster in Centreville.
Hope that helps.
[($550K x 5% x 360 months) + taxes and insurance)]. Of course, for investment property you must have at least 20% down. Do you think renters will be willing to pay $3,500 per month to live in a $550K home?
Just a rhetorical question.....
Of course, unless you purchase in time to get advantage of the low interest rates and find a great bargain.
I would love to hear more of your thoughts!