The 2% rule is the most brilliant ever
The 2% rule TEST is a quick screening tool for rentals. It says:
"The monthly rent should be about 2% of the purchase price for a rental to be a good cash flowing rental"
I really don't know when People here started using 2%. Traditionally it has been 1% but in normal interest rate climates 1% does not work very well.
The point is, once you figure the right percentage for your goals and your market. Then this can quickly rule out 90% of deals with a quick top of your head calculation. At any given time there are thousands of properties on the market. You obviously can't do an in depth analysis of all of them so you need a quick screening tool to eliminate the ones that are simply not even close to a deal.
That is exactly what this tool is designed to do no more, no less.
Don't let the naysayers tell you every property deserves an in depth analysis. They want to take away a valuable screening tool. Time is your most important asset.
