1% rule
rules rules rules.
The good old "rent should be a minimum of 1% of the property value to make ends meet" is failing currently. With housing prices in the DFW area rising rapidly there is no way the existing market could sustain this rule.
I ‘guestimate’ that rent is running on average of 0.75 to 0.9% or worse on property values. What are BP's thoughts on making money from rent when the market does this? Understandably those who have bought 3-4 years ago, now have the equity and they will gain as they can raise their rents, but new entrants will be faced with less cash flow and risk. For some markets the lower percentage is normal and investors hang off the longer term capital gain in the property.
Any thoughts and advice on making money in this scenario?