2 percent test

[Victoria Bravo]

hi, I am new to the BP community, and I have started the beginners course. I have a question about the 2 percent test. Is he implying that for a property that cost 200,000 you are supposed to charge 4,000 for rent? That doesn't seem right. Again, I'm new. Can someone enlighten me about this? Thank you!

[Dawn Anastasi]

Originally posted by @Victoria Bravo:

hi, I am new to the BP community, and I have started the beginners course. I have a question about the 2 percent test. Is he implying that for a property that cost 200,000 you are supposed to charge 4,000 for rent? That doesn't seem right. Again, I'm new. Can someone enlighten me about this? Thank you!

No you have it backwards. That means if a property can rent for $2,000 per month, you should pay no more than $100,000 for it.  You can't control market rent.  You have more control over what you can buy a property for than what you can rent it for.