Using the 1% or 2% Rule on Small Multifamily Properties

[Matthew Odou]

Hi everyone, 

I'm currently analyzing and pre screening small multifamily properties, but I have a quick, yet simple, question. Obviously using the 1% or 2% rule means that a $100,000 property should rent for $1,000 or $2,000 month. But if I'm analyzing a $200,000 triplex for example, how would you use the 1 or 2% rule on that? Would all the units combined equate to $2,000 or $4,000 a month? 

Thank you for taking the time to help me out with this! I appreciate everyone's feedback!

[Lee Ripma]

@Matthew Odou

Correct, it’s on gross rents. So 1% rule on a 300k 4plex is it should rent for 3k/mo (for all units).