Is real estate (property) worth investing as rental income?

Is real estate (property) worth investing as rental income?

I would like to make on assumption in order to reduce uncertainty and number of plausible scenarios :  the  real estate price will be constant and appreciate at inflation rate and all received income will be invested in mutual fund to get average income.

I am considering buying a well positioned one bed room apartment – 750 square feet (68 m2)  with parking lot.

Initial cost $ 170, ooo,  the parking lot will cost additional $ 50,000.  The parking will improve occupancy rate and make it more attractive in busy center.

The apartment will be furnished, so additional $20,000 is required to buy the basics.  Total investment is $240,000 USD.



Rental income basics:
- the flat occupancy rate 11 months a year, on average
- one monthly rate a year is agents’ fee.
- Some utilities (apart from electricity, gas, phone, etc..) are at landlords expense – $ 250 USD a month ($ 3000 USD a year).
-  The apartment is rented out for $ 1000 USD a month or $10, 000 USD a year, after agent's fee.
- Income tax is 15%, the landlord (property owner)  will be left with $6,000 USD a year.
- It is assumed that the flat has to be completely redecorated every 10 years, leaving with $4,000 USD year in the pocket.

This means that the apartment should last 60 years, before it will start bringing any income.

Advantages:
- This is inflation adjusted income, relatively low risk income (if no mortgage involved)
- The calculations are conservative.

There is a potential to improve income in exchange for the time – i.e. manage it actively, do some redecoration myself, etc. This is time consuming, with potential pit falls  due to lack of experience and knowledge.

On in all, if not planning on property speculation and actively managing it, the income is stable, inflation protected, but average.

To live comfortably on it and achieve my goal I will need to invest nearly $ 3,600,000  USD in the properties to get the desired income.