The 2% rule yet again - parameter seems incorrect

[JJ Cole]

I have the read the 2% rule as the rent should be 2% of the purchase price. Wouldn't be more apt to frame this % rule in terms of the mortgage on the property?

One could put 25% down instead of 0% down and cash flow that same on a property with less than 2% rent - purchase price ratio (of course your cash return would be lower). So my question is -- is there a % rule that relates month rent to total mortgage loan amount? I am looking to find this since I need to cash out refi 6 props that I bought cash. Thanks in advance.

[Nathan Emmert]

Given today's rates and a 25% down payment... you need about 1.5% of purchase price in rents to generate a 15% CoC return.

The "2% rule" is simply a way to determine if a place with rents around $500 a month will cash flow $100/door.

Some people use CoC... others like a certain amount per door. There are lots of ways to analyze deals and everyone has different criteria. Set your own based on what's available to you given your constraints (time, comfort, geography, etc) and your goals... go from there, simple.