Rule of thumb in Renting- 1 % rule
Hey BP Family,
I remember hearing on a BP podcast that a common rule of thumb when renting to tenants is to use the 1% rule. I am actively searching for duplexes and found a 2 bedroom 1-1/2 bath (with a basement and garage) that I really like for $119,995, so 1% of that would be around $1200. I honestly don't think that a tenant will be willing to pay that much in rent. The neighborhood in my opinion is a B- grade, and comps in the area are renting for around $850. I guess my question is if I were to purchase this duplex, do I lower the rent or try my luck?