$100 a month for 20 years is $24,000. Sounds like a fucking good buy to me.
It's not. If it's before taxes and maintenance costs, it's terrible. There's a reason that most real estate investors assume that 50% of gross rents go to expenses. This guy is probably at least -$200 per month when all is said and done, he just doesn't know/realize it.
It depends on the market over the next years/decades, right?
So I have a friend who I tease is becoming a slum lord. He doesn't really like 401ks. So he bought a condo, lived in it. Then he bought another condo (foreclosure) when the market was down, and rents it out. This one is very cash positive. Then he bought a house for his wife and kids and him to live it, and rents out the first condo. But the first condo isn't cash positive - it breaks even before taxes.
Overall, he's a little cash positive.
The housing market has swung so much the last 15 years that it depends on when you buy. But right now a 2BR house or condo is renting for $3000+ a month. Now, if we rented our house, based on when we bought (bad time), that would pay mortgage, taxes, insurance, nothing left over.
However, 10 years from now, if rents are $4000/month, it would be cash positive. Same with my friend. In the long run, if rents keep increasing, he will have two cash positive rentals.
It's very market dependent though. Small towns with not a lot of jobs wouldn't fare as well, I expect.