Rental property: less than 1%
New to the forum. We put an offer on a townhome in an area close to us and like the townhome area. There's 3 townhomes in each building. Our realtor gave us the average rents in the area and it would be closer to .7%. It will cash flow a little. Main question is what is the lowest percentage you will go for rental properties before you consider buying. We've had good appreciation in Raleigh so it's a very active market.
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@Donna Matessa A good Rule of Thumb is to not let these REI Rules of Thumb interfere with your analysis of a deal. Put pen to paper, see if the cash flow, appreciation, risk, reward all work for you or don't work for you. The 1% rule is just a spitball way to look at a deal on the surface very quickly. With townhomes, your due diligence should include checking on the financial stability of the HOA, and if the HOA covenants restrict rentals.