Is the 1% rule dead in Arizona?
Investor · AZ · Member since 2024 · 25 posts · 8 votes
Is the 1% rule dead in Arizona?
Most Popular Reply
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
1yQuote from @Ken M.:
Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
Skyline Properties
35 Replies
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
The 1% rule is tough to achieve, but we get it in AZ and TX by buying below market. The way you buy below market is To Not to use the MLS. There are so many other ways to find good deals. But, you need some money and you have to work at it.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes1y
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Skyline Properties - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yIt's only dead if you are spending too much on your purchase.
Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes1y
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
Skyline Properties - Investor · AZ · Member since 2024 · 25 posts · 8 votes1y
Quote from @Ken M.:
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
The 1% rule is tough to achieve, but we get it in AZ and TX by buying below market. The way you buy below market is To Not to use the MLS. There are so many other ways to find good deals. But, you need some money and you have to work at it.
Will you enlighten me to some of the methods you use to find the properties?
- Investor · AZ · Member since 2024 · 25 posts · 8 votes1y
Just seems to me that buying at sub 1% is almost not worth it. The cash-on-cash return is obviously much lower. I can make offers that would cause the 1% rule to hold, but these would often be at around 60% of asking price or market value. I know deals such as this get done all the time, but I seem to have little luck targeting sellers that are motivated enough.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @JD Martin:
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
.
Sure, obvious but over looked. A property is worth what a willing seller will take from a willing buyer.
Is it possible to buy a property in San Diego low enough to get 1% from it, yes. Is it possible to buy a property in Seattle low enough to get 1%, yes. And is it possible to buy a property in Chicago low enough to get 1%?, yes
Of course, if you look the right ways. And What does it take? It takes getting off the road everyone else is driving (the MLS) and putting some work into it. Using your smarts. There are wholesalers in every major city in the country and they are buying at 70% to 90% of value all day long, every day of the week. You can too, without being a wholesaler or an agent.
You can walk into a mall to a jewelry store and buy gold, which is simple, but you pay a huge markup. Same with houses and the MLS. Huge markup.
Most people choose to do things the easy way. But that wasn't the question, The question was CAN you do it, not HOW do you do it. - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yIt isn't easy. If it were easy, everybody would be doing it. It takes work, training, skill and
Quote from @Anthony Sigala:
Just seems to me that buying at sub 1% is almost not worth it. The cash-on-cash return is obviously much lower. I can make offers that would cause the 1% rule to hold, but these would often be at around 60% of asking price or market value. I know deals such as this get done all the time, but I seem to have little luck targeting sellers that are motivated enough.
perseverance, and once you get the hang of it, they keep coming along.
, - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes1y
Quote from @Ken M.:
Quote from @JD Martin:
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
.
Sure, obvious but over looked. A property is worth what a willing seller will take from a willing buyer.
Is it possible to buy a property in San Diego low enough to get 1% from it, yes. Is it possible to buy a property in Seattle low enough to get 1%, yes. And is it possible to buy a property in Chicago low enough to get 1%?, yes
Of course, if you look the right ways. And What does it take? It takes getting off the road everyone else is driving (the MLS) and putting some work into it. Using your smarts. There are wholesalers in every major city in the country and they are buying at 70% to 90% of value all day long, every day of the week. You can too, without being a wholesaler or an agent.
You can walk into a mall to a jewelry store and buy gold, which is simple, but you pay a huge markup. Same with houses and the MLS. Huge markup.
Most people choose to do things the easy way. But that wasn't the question, The question was CAN you do it, not HOW do you do it.Just because someone is buying at 70 to 90% of value doesn't mean anything with respect to the 1% "rule". In my market, right now, most anything you bought at 70% of value still wouldn't meet that rule. I guarantee virtually no one is meeting that rule in SD because they're all on here looking to buy in Cleveland or Detroit because in that market price to rent ratios are so askew that buying at a 50% discount probably doesn't get you the 1% rule.
If we're going to just talk in hypotheticals, of course anything is probably possible anywhere but highly unlikely.
Skyline Properties - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @JD Martin:
Quote from @Ken M.:
Quote from @JD Martin:
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
.
Sure, obvious but over looked. A property is worth what a willing seller will take from a willing buyer.
Is it possible to buy a property in San Diego low enough to get 1% from it, yes. Is it possible to buy a property in Seattle low enough to get 1%, yes. And is it possible to buy a property in Chicago low enough to get 1%?, yes
Of course, if you look the right ways. And What does it take? It takes getting off the road everyone else is driving (the MLS) and putting some work into it. Using your smarts. There are wholesalers in every major city in the country and they are buying at 70% to 90% of value all day long, every day of the week. You can too, without being a wholesaler or an agent.
You can walk into a mall to a jewelry store and buy gold, which is simple, but you pay a huge markup. Same with houses and the MLS. Huge markup.
Most people choose to do things the easy way. But that wasn't the question, The question was CAN you do it, not HOW do you do it.Just because someone is buying at 70 to 90% of value doesn't mean anything with respect to the 1% "rule". In my market, right now, most anything you bought at 70% of value still wouldn't meet that rule. I guarantee virtually no one is meeting that rule in SD because they're all on here looking to buy in Cleveland or Detroit because in that market price to rent ratios are so askew that buying at a 50% discount probably doesn't get you the 1% rule.
If we're going to just talk in hypotheticals, of course anything is probably possible anywhere but highly unlikely.
. You speak correctly that "anything is probably possible anywhere but highly unlikely" to you.
You are also answering a question that wasn't asked. Which is accurate by the way. Most people won't put in the work.
His question "The question being, does this still hold true for Arizona?"
My answer, yes I currently am buying a $165,000 property in Phoenix (not listed on the MLS) using one of my methods to find, using only $5,871 plus closing costs of my money. It will rent for $1,500 a month. It, will go up next year. I will be into it about $9,371 with closing and have a payment PITI including HOA of $1,205. I do not possess any special list. I simply know where to find the nuts; under the tree of course. I do have reserves to cover contingencies.
Let's just say, I'm satisfied with those numbers.
Had I had to use a bank, I would have had to put down 20% for $33,000, plus closing and my payment on the remaining would be $1400 PITI including HOA.I am working on two others in the $350,000 range with the same ratios. These I might assign to others. There are properties people, just put in the work.
- Member since 2025 · 2 posts · 0 votes1y
Not sure what markets y'all are referring to, but In the Chicagoland area, the 1% rule stays strong. I recently purchased an apartment for $230,000, which came with a tenant paying $2,250/mo rent. With the lease up for renewal next month, we’ve decided to keep the rent at the same rate for this year. We might consider a slight increase in 2026.
Quote from @JD Martin:
Quote from @Ken M.:
Quote from @JD Martin:
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
.
Sure, obvious but over looked. A property is worth what a willing seller will take from a willing buyer.
Is it possible to buy a property in San Diego low enough to get 1% from it, yes. Is it possible to buy a property in Seattle low enough to get 1%, yes. And is it possible to buy a property in Chicago low enough to get 1%?, yes
Of course, if you look the right ways. And What does it take? It takes getting off the road everyone else is driving (the MLS) and putting some work into it. Using your smarts. There are wholesalers in every major city in the country and they are buying at 70% to 90% of value all day long, every day of the week. You can too, without being a wholesaler or an agent.
You can walk into a mall to a jewelry store and buy gold, which is simple, but you pay a huge markup. Same with houses and the MLS. Huge markup.
Most people choose to do things the easy way. But that wasn't the question, The question was CAN you do it, not HOW do you do it.Just because someone is buying at 70 to 90% of value doesn't mean anything with respect to the 1% "rule". In my market, right now, most anything you bought at 70% of value still wouldn't meet that rule. I guarantee virtually no one is meeting that rule in SD because they're all on here looking to buy in Cleveland or Detroit because in that market price to rent ratios are so askew that buying at a 50% discount probably doesn't get you the 1% rule.
If we're going to just talk in hypotheticals, of course anything is probably possible anywhere but highly unlikely.
In Dec 2020 I purchased a 1% property in San Diego. At that time, 0.75% with my underwriting was showing positive cash flow in my market at 80% LTV for class c. It was a near unicorn find. It was off market, I paid a local bird dog $20k for helping to get it to the close and even including that $20k at market rate it met the 1% rule.
Today my underwriting would not have a 1% ratio with 80% LTV as positive cash flow in class C. It may be sufficient for small positive in class b (probably not - likely still negative cash fliw) and would be cash positive in class A.
And 1% ratio is still a near unicorn find in San Diego. But if it was possible in Dec 2020, it is likely possible today.
Quote from @Ken M.:
Quote from @JD Martin:
Quote from @Ken M.:
Quote from @JD Martin:
Quote from @Ken M.:
It's only dead if you are spending too much on your purchase.Quote from @JD Martin:
The 1% "rule" is just about dead everywhere outside of the midwest and some places in the south that are still relatively cheap. Price to rent ratios have skyrocketed everywhere and it's pretty unlikely rent will ever get to a point where it evens back out because at those levels it's just as cheap/cheaper to buy (not to mention most renters can't afford anything like that).
Well, of course - that's obvious - but most people in most places in the US are going to spend too much on their purchase because that's what's available. Years ago I bought houses for $25k in my market. Pretty easy to make 2% or more when you're spending that kind of money. These days I can't buy a lot for $40-50k. Any house here that's sub $100k, on or off market, is going to be so bad it will need $30-75k in rehab. Here once you start passing $1500 in rent your pool is getting pretty shallow. I'm sure I could go to some midwest markets or even some more depressed markets in my region and get better pricing, but that's out of my wheelhouse at this point in my life as I have no desire to learn new markets when I'm closer to the end than the beginning.
.
Sure, obvious but over looked. A property is worth what a willing seller will take from a willing buyer.
Is it possible to buy a property in San Diego low enough to get 1% from it, yes. Is it possible to buy a property in Seattle low enough to get 1%, yes. And is it possible to buy a property in Chicago low enough to get 1%?, yes
Of course, if you look the right ways. And What does it take? It takes getting off the road everyone else is driving (the MLS) and putting some work into it. Using your smarts. There are wholesalers in every major city in the country and they are buying at 70% to 90% of value all day long, every day of the week. You can too, without being a wholesaler or an agent.
You can walk into a mall to a jewelry store and buy gold, which is simple, but you pay a huge markup. Same with houses and the MLS. Huge markup.
Most people choose to do things the easy way. But that wasn't the question, The question was CAN you do it, not HOW do you do it.Just because someone is buying at 70 to 90% of value doesn't mean anything with respect to the 1% "rule". In my market, right now, most anything you bought at 70% of value still wouldn't meet that rule. I guarantee virtually no one is meeting that rule in SD because they're all on here looking to buy in Cleveland or Detroit because in that market price to rent ratios are so askew that buying at a 50% discount probably doesn't get you the 1% rule.
If we're going to just talk in hypotheticals, of course anything is probably possible anywhere but highly unlikely.
. You speak correctly that "anything is probably possible anywhere but highly unlikely" to you.
You are also answering a question that wasn't asked. Which is accurate by the way. Most people won't put in the work.
His question "The question being, does this still hold true for Arizona?"
My answer, yes I currently am buying a $165,000 property in Phoenix (not listed on the MLS) using one of my methods to find, using only $5,871 plus closing costs of my money. It will rent for $1,500 a month. It, will go up next year. I will be into it about $9,371 with closing and have a payment PITI including HOA of $1,205. I do not possess any special list. I simply know where to find the nuts; under the tree of course. I do have reserves to cover contingencies.
Let's just say, I'm satisfied with those numbers.
Had I had to use a bank, I would have had to put down 20% for $33,000, plus closing and my payment on the remaining would be $1400 PITI including HOA.I am working on two others in the $350,000 range with the same ratios. These I might assign to others. There are properties people, just put in the work.
Not to state the obvious but purchase at $165k with $1500/month rent is not a 1% ratio. You have a 0.91% ratio. This could be a good ratio for that market, but it is not a 1% ratio.
@Anthony Sigala my view is the markets that it is easiest to find a 1% ratio are unlikely to be markets where you will achieve good cash flow over a long hold. Rather than concentrate on the initial cash flow, concentrate your effort on markets that have indicators of strong rent growth. In general these are either growth markets or markets short housing that has significant hurdles to adding additional housing.
My market has been a poor initial cash flow market forever. The definition of poor initial cash flow has changed with time. Just a few years ago, poor meant not much positive cash flow. Today poor means negative cash flow. However every one of my purchases from 10 or more years ago in my market have current market rent of at least a 2% ratio. The power of rent growth.
Good luck
- Real Estate Agent · Phoenix, AZ · Member since 2024 · 38 posts · 24 votes1y
Hey Anthony, I acquire properties local to Phoenix and similar to what others have said on the thread, it's as close to dead as can be.
The only time I see it actually work out to the 1% rule is on Section 8 properties, which can be great investment opportunities despite the stigma around them.
- 1yAustin WolffPro MemberRental Property Investor · Los Angeles, CA · Member since 2024 · 139 posts · 134 votes
The national median rent-price ratio is about 0.35%. Most quality markets worth investing in for the long-term are seeing 0.50% or below. In my opinion, the 1% rule was a good rule of thumb during the 2010's. But I no longer think it serves the majority of investors in this new market cycle we're in.
- Lender · Member since 2024 · 60 posts · 26 votes1yOf course it isn't fully "dead" but it is real hard to find and only possible off market. Properties in Tucson are closer to that 1% rule mark or even other smaller cities but then there is more risk. Analyzing an investment with the Cash on Cash return makes more sense to me.
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
- Investor · AZ · Member since 2024 · 25 posts · 8 votes1y
Quote from @Thomas McPherson:
Of course it isn't fully "dead" but it is real hard to find and only possible off market. Properties in Tucson are closer to that 1% rule mark or even other smaller cities but then there is more risk. Analyzing an investment with the Cash on Cash return makes more sense to me.Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
- Realtor · Phoenix AZ, USA · Member since 2023 · 209 posts · 81 votes1y
In AZ we look off market deals almost exclusively. Not much good stuff on the market right now that can cash flow without work and on the MLS the prices don't allow for some extra reno.
My clients are buying distressed off market properties and BRRRR'ing them or flipping. The other route you can look into is purchase+rehab loans if it's going to be a primary, if it's an investment then using hard money, bridge loan, or DSCR.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
@Anthony Sigala that "Rule" was created for mostly Class B properties BEFORE the Great RE Crash of 2008-2010.
Values after the Crash dropped so much, that it could also be used for Class A rentals.
Values are now more than their pre-crash highs, so the rule now only applies to Class B & C rentals.
How are you identifying Class B & C submarkets in your area, so you can properly apply the rule to the right rentals?
Logical Property Management4.9469 Reviews We just this week bought a 6 unit building in a top notch suburban school system for $615,000 with gross rents of $4615, but to make the deal cashflow (barely), had to raise the gross monthly rents to $6570 on 4/1. We'll lose money for 75-90 days but the new rent is market so some will stay and not forcing people that can't afford it to move in the middle of a very cold winter I think buys a tiny bit of good will and is the decent thing to do. We will then, as the units turn over, get rents up a good bit further with additional design improvement renovations and hopefully reno into lower interest rates when they drop or at the very least in 5 years on our 20 year we'll have paid off enough to refi into a smaller loan.That is the only kind of smaller deal we can find in neighborhoods where we want to buy now.
Quote from @Jill F.:
We just this week bought a 6 unit building in a top notch suburban school system for $615,000 with gross rents of $4615, but to make the deal cashflow (barely), had to raise the gross monthly rents to $6570 on 4/1. We'll lose money for 75-90 days but the new rent is market so some will stay and not forcing people that can't afford it to move in the middle of a very cold winter I think buys a tiny bit of good will and is the decent thing to do. We will then, as the units turn over, get rents up a good bit further with additional design improvement renovations and hopefully reno into lower interest rates when they drop or at the very least in 5 years on our 20 year we'll have paid off enough to refi into a smaller loan.That is the only kind of smaller deal we can find in neighborhoods where we want to buy now.
What area did you buy in? We're looking to get into AZ.
- We are local landlords in NE Ohio- Greater Akron area.
Quote from @Kevin Lee:
Quote from @Jill F.:
We just this week bought a 6 unit building in a top notch suburban school system for $615,000 with gross rents of $4615, but to make the deal cashflow (barely), had to raise the gross monthly rents to $6570 on 4/1. We'll lose money for 75-90 days but the new rent is market so some will stay and not forcing people that can't afford it to move in the middle of a very cold winter I think buys a tiny bit of good will and is the decent thing to do. We will then, as the units turn over, get rents up a good bit further with additional design improvement renovations and hopefully reno into lower interest rates when they drop or at the very least in 5 years on our 20 year we'll have paid off enough to refi into a smaller loan.That is the only kind of smaller deal we can find in neighborhoods where we want to buy now.
What area did you buy in? We're looking to get into AZ.
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
Yes, unfortunately it is dead in a lot of states, but not Columbus Ohio! You can still find deals that are priced from $120-180k that do positive cash flow and hit the 1% rule. Plus, you get amazing appreciation potential due to how much population growth, job growth, and companies moving and developing here. I would characterize Columbus as some positive cash flow but amazing appreciation potential. I would suggest looking in Columbus Ohio for so many reasons - population growth, job growth, and companies moving here. You can find positive cash flow and the 1% rule here! Happy to connect and answer any questions you may have!
Jimmy Lieu, Red 1 Realty4.9122 Reviews - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes1y
Quote from @Jimmy Lieu:
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
Yes, unfortunately it is dead in a lot of states, but not Columbus Ohio! You can still find deals that are priced from $120-180k that do positive cash flow and hit the 1% rule. Plus, you get amazing appreciation potential due to how much population growth, job growth, and companies moving and developing here. I would characterize Columbus as some positive cash flow but amazing appreciation potential. I would suggest looking in Columbus Ohio for so many reasons - population growth, job growth, and companies moving here. You can find positive cash flow and the 1% rule here! Happy to connect and answer any questions you may have!
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @James Wise:
Quote from @Jimmy Lieu:
Quote from @Anthony Sigala:
We are all aware of the 1% rule--the gross rent produced by a property must equal 1% of the of the property's acquisition cost. The question being, does this still hold true for Arizona? If not, what metric do you guys use?
Yes, unfortunately it is dead in a lot of states, but not Columbus Ohio! You can still find deals that are priced from $120-180k that do positive cash flow and hit the 1% rule. Plus, you get amazing appreciation potential due to how much population growth, job growth, and companies moving and developing here. I would characterize Columbus as some positive cash flow but amazing appreciation potential. I would suggest looking in Columbus Ohio for so many reasons - population growth, job growth, and companies moving here. You can find positive cash flow and the 1% rule here! Happy to connect and answer any questions you may have!
But Columbus is awesome! In a lot of states, you can't find the 1% rule or any positive cash flow. My client recently purchased a 3/2 single family house for $160k that was near turnkey and already rented at $1900/month and in a very desirable residential neighborhood! I can't find a lot of other cities where you can find deals with positive cash flow and amazing appreciation potential.
Plus Anduril just announced another 4k jobs and over 1B in development in Columbus Ohio. That's with Intel, Honda, Amazon, FB, Google, etc. that are already developing here!
Jimmy Lieu, Red 1 Realty4.9122 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.