Is cash flow on LTRs dead in 2026?
I keep hearing about a 1% rule that is impossible to hit in most markets. My simple understanding (also new here) is that $300,000 would need to rent for $3,000 a month, and even that doesn’t guarantee a profit after the mortgage, taxes, insurance, vacancy, maintenance, etc.
So... If I'm only cash flowing $50-$100 a month, it could take years to recover my closing costs and 1 repair could wipe out my profits.
For people still buying long term rentals:
1. What is the min monthly cash flow that makes the deal worth it for you?
2. Is the 1% rule useful or just a quick filter?
3. Are most people banking on appreciation and principle pay down at this point?
Also curious,
Where are the best deals right now if they are not with long term rentals?
Most Popular Reply
The 1% rule is a an outdated rule of thumb to underwrite a deal in seconds. In todays market, most of the time, it just does not pencil in many markets.
Min monthly cash flow would differ per investor and whatever their goals are. An underperforming property can be added to a portfolio solely based on appreciation potential and location if other assets can offset the lack of cashflow.
Deals are still out there. Many investors have to be flexible.