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Updated over 5 years ago on . Most recent reply
Does the 2% rule work most of the times?
Hi - I am new to rental investments and came across the 2% rule (monthly rental should be 2% of the purchase price). I am looking to buy and hold condos (greater Cincinnati area). In my area, condos prices are generally $150k-$175K and they generate rent between $1700-$1800 per month. Based on the 2% rule/guideline, the rent should be in the $3000-$3500 range which doesn't seem feasible. In such scenarios, is it ok to consider the rental property even if it can't satisfy the 2% guideline?
Thanks in advance.
Parag
Most Popular Reply

Trust the comparable rents and don't use a rule. Plus, you should not be paying full price for any rental that you buy. Take a course on real estate investing before you move forward. Good luck.
- Stephen J Davis