Maintenance and vacancy are usually the killers that people fail to plan for adequately. Some years it can be zero, especially if you've lived there a while and have the place in good shape. Some years you will need a new roof and carpets and it will sit empty for three months while you do it.. These costs always seem to end up higher than you think they will.
In our case, we add up the positive cashflow (after maintenance allocation), tax benefits, and equity pay down by renters to find total return, and then divide by our expected extractable equity to find our effective rate of return. We figure 10% transaction costs in a sale, so extractable equity is 0.9 times the difference between expected sale price and remaining loan balance.
This makes new mortgages look more profitable, since you have less equity. That's backwards from what you might expect, where older mortgages are getting a bigger equity contribution, but it helps me mentally compare the ROI to alternatives like selling and buying index funds.
Generally speaking, my equity is so low that even clearing $5k/year (excluding depreciation) in cash flow, taxes, and equity pay down makes them look pretty good compared to selling to buy stocks.
Then there is potential appreciation. You're about 1:6 leveraged (50k equity on 300k value) so if the property appreciates in value at 3% per year, that's like getting 18% return on your equity. That part is pure speculation though.
