50% Rule vs 2% Rule? What do you prefer and why?

3 Replies

They are both junk in my opinion because people try to apply them nationally even though expenses vary wildly from market to market, analyze properties individually, and you will soon come to your own rules of thumb for your area.  That way you can take all your local context into account and be able to take on some properties that others overlook because they follow a strict rule.

@Trevor Morgan I prefer to think of these “rules” as starting points. I do believe in the 1% rule (more in line with what I would be purchasing than 2%), but that’s not the end point. The area has to make sense, the potential to match up to my goals, etc.

In many cases, I prefer the 1% property over 2%.