This is a great discussion...
So I'm doing some reading and looking at the "rules of thumb". 50% rule, 2% rule and 70% rule.
50% rule of rental says this house is nowhere near a good rental. Rent in this area would be about $1800 so expenses would be half that, or $900. $900 + my projected mortgage of $1500 is $2400.
To make this a good rental, by the 50% rule, I'd have to pay around $100,000. That's not possible in this area, period. Even stretching the rule a lot, I don't think there's a house in this town that would meet that criteria. Perhaps that's why there are almost no rental houses in my town! :)
Let's look at the 2% rule. Monthly rent $1800 / 2% = $90,000. Again, not properties in my town are that price, period. Not even close.
Ok, let's look at flipping
The 70% rule says multiply the projected sale price after renovations by 70%. I think conservatively I could get $320,000 for the house, but I will check with my mother-in-law (my realtor). $320,000 * 70% = $224,000. That's my target offer if things look good today and my sale price estimation is correct.
I'll keep you posted.