Quick Method to dismiss or look into rental property
I am looking for input on methods being used to quickly qualify or disqualify properties. Spending a lot of time running numbers and wanted input from the community on what key metrics are being used to evaluate a property quickly so it either gets a deeper dive or it is scratched from the list.
Most Popular Reply
Some use the 1% Rule. Goes like this:
Property must have monthly rent of at least 1% of the "all in" cost (purchase price + closing costs + rehab + holding costs). Example: If it rents for $500, spend no more than $50,000.
I use the 2% Rule. $30,000 "all in" rents for $600.
Most houses that do not meet at least the 1% Rule will not cash flow positive unless you pay cash or have a sizable down payment. It's a quick-n-dirty method, and there are others.