Property doesn’t meet 1% rule but cash flows. What am I missing?

[Logan L.]

Hi BP community!

I am a relatively new investor in Fayetteville, NC. My first rental property is a 4 bed, 3 bath single family. Purchase price was $150k and current rent is $1,475. My analysis of the property is as follows:

- Income: $1,475

- mortgage (taxes and insurance incl.) $920

- no HOA fees

- no landlord-paid utilities

- I self-manage so no property management fee

- pest control service $30

- CapEx: 10% or $147.50

- Vacancy: 5% or $73.75

$1,475 - $1,171.75 = $303.25 positive cash flow.

In regard to 1% rule, my property is currently sitting at 0.98% yet I’m seemingly still cash flowing $300. Can someone tell me if I’m missing something? Thanks!!