My wife and I have been looking into purchasing a 3/2 in my hometown as a rental property. I've read a bit on here and found the 1% rule particularly helpful. I believe it means if you pay 100,000 for a home, you need to aim to get 1,000 in rent from it. I've been following Zillow and Trulia and there are a few properties that I want to look at (one is a shortsale) which are estimated to be rentable at above the 1% rule. I certainly wont base my decision on it, but I do use it as a preliminary reference. So far, we have been pre-approved for a conventional loan through Quicken Loans at 4.4% up to 300k (we are looking in the 90-130k range). We will put down 20% but we only have about 20k between the two of us at the moment so I wonder if we are trying to bite off more than we can chew? I know there will be closing costs (probably around 4k from what Ive been told) and I will need an inspection and title insurance so we are pushing it. So we are in a situation that if we pull the trigger on this we will need a property that is pretty much ready to be rented with little maintenance. However, I have crunched the numbers and I know we would be able to pay the mortgage, insurance, and taxes on the property going forward even if we are unable to rent the property. I expect the Mortgage, insurance, and taxes would come out to around $800 a month on a 100k loan, and even after maxing our retirement accounts we have enough left over to cover this without changing our lifestyles. Only problem is that our safety net will rebound slower. Do you think we are biting off more than we can chew at the moment? Maybe we should risk letting interest rates go up and wait another 6 months so that we can build up a 8k or so safety net after closing?