How does an investment work without the 1% rule?

[Christopher Davis]

Kind of wondering generally how a SFH rental investment will work if the 1% rule cannot be met. I know it's not a concrete yes/no rule, but I don't see how the numbers work in your favor after that.

Homes in my area are at 220-260k for a cute, basic 2 bedroom. It may also need 10-20k in rehab. That plus 20% down plus closing costs, it adds up rents may be $1200, which barely breaks on just the loan.

Possible solutions just move farther out of my metro area?

[Russell Brazil]

Yield is a function of risk.  Higher risk properties/markets will have higher yields.  Lower risk properties/markets will have lower yields.  Nothing works or doesnt work in any type of investment.  It is all a matter of risk and probability.  Most of my properties, upon initial purchase have ratios in the 0.5% to 0.66% range.