Updated over 12 years ago on . Most recent reply
Interesting Relation Between 2% and 50% Rules
The 2% Rule is the same thing as using the 50% Rule and applying a 12% Cap Rate on the annual NOI.
I was looking at some properties and noticed I got the same value using the 2% rule and using the 50% for an estimate of NOI and happened to be using a 12% Cap.
Being a math dork I did write it out symbolically and they both reduce to the same mathematical equation (Which BTW is just multiply the monthly rent by 50).