The 50% Rule adjusted when you know PITI

[Jason Polykoff]

Hi BP, quick question... if you know the PITI of a property, how should you adjust the 50% rule to account for vacancy, maintenance, etc.? Would it be more like the 25% rule at that point? Thanks!

[Joe Splitrock]

@Jason Polykoff the 50% rule is often applied to multifamily and often doesn't apply as well to single family, because you don't have expenses such as utilities in most cases. Keep in mind a "rule of thumb" is meant to facilitate fast calculation when all the numbers are not available. If you have the actual numbers, you can plug them into a calculator and figure out the true cash flow.