BiggerPockets

45K as per 2% rule

Hmmm, haven't priced them real well but homes under $100k out here are few and far between. I'd say $80 - 100k.

My clients like to see 1.15% of purchase price for rents. These are for newer homes in nice areas.

Also, throw the 2% rule out the window. It is not a real relevant indicator for every market these days.

2 percent rule starts to loose relevancy once you start exceeding gross rents of around 500 to 500 in my area and in many others from what I have gathered on BP.

Is the 2 percent rule more applicable to multiple unit buildings when moving into higher prices?

First of all Sir, I said in the Fourties. For the sake of the impaired thats $40,000 to $49,999. Now, just because your personal and best holdings don't weigh up, does that make my statement untrue Mr. Davis. The question was how much would I pay and I said in the $40,000s. There are places here where you can be all in for $40k and rent for $900. Maybe there is opportunity after all for us to work together now! From time to time just to name a few areas where you can catch a deal like this would be in the Reese point sub, Country side sub, and the Trafalgar sub. 2197 Bobolink just sold in Oct for $34,000. I don't know how much it cost you for renovation, but most of these homes are pure cosmetic rehabs that I can get done for $10k to $15k easy, and that still puts me in the $49k bracket. For more information, feel free to give me a call. Your friend James.

I've found most advice on the contradictory Nathan. People say to invest geographically where you'll make more, and then they say stuff like "boots on the ground" and "know your market."

Pick one or the other, because if it's 3 states away, you won't be able to know your market nearly as well, nor have as much time in with boots on the ground.

Some prefer one way, some the other.

I agree with Joe that I have found most advice on the contradictory.

Also, I don't think it's always about where you can make the most money, at least not for me. For me, it's also about having peace of mind at the end of the day and knowing that everything is going well with my investments. Another thing you need to factor in the out of state investments is the extra cost of flying down every now and then to check on your properties. Once you start adding in the extra costs and time spent, the higher return doesn't look as good, IMHO.

To answer the OP's question, for a SFH, in my market I can get $900/month with all in cost of around $40k. The ARV of these homes will be around $65-75k.

I also agree with Curt. Why in the world would a thirty-something year old buy a sfh for $50K cash for $850/month rents? First of all, this individual is using no leverage. He's not building equity with pricipal pay down (yes, I understand the cash flow from said propert could be used to build equity in other ways). Whatever place he purchased is either old as hell, in a very undesirable area, or both. And, most importantly, what the heck does a 30-something year old need with huge amounts of cash flow? He's sacrificing capital growth as a result.

With that same $50K cash, you could use it as a downpayment on a brand new duplex worth $250,000. So, instead of owning a crappy $50K shack, you could own a brand new $250K property in a fantastic area. Your long-term prospects are immesurably better.