50% rule 1% rule

[Johnny Moua]

Do these rules apply as much if you are working a full time job for another source of income? Would you still have cash flow if you just come close to these percentages?

[Brent Coombs]

@Arthur Picanco, the "50% rule" postulates that on average, the ongoing expenses (not including mortgage) for investment properties will be roughly 50% of the gross rent return.

The "1% rule" means that in certain markets you should be looking for properties whose gross rent return equals at least 1% of the purchase price, per month! 

In other (riskier?) markets, it might be the "2% rule" that might be the standard return expected.

In some other markets where solid ongoing appreciation occurs, LESS than 1%/m may be OK.

Like most ideas relying on unknowable future specifics, these "rules" aren't set in stone. Cheers...