%50 rule question

Member since 2026 · 1 post · 0 votes

I've been learning about the %50 rule. I'm trying to see if I understand correctly. Would it be accurate to say that the rent for a property needs to be twice the mortgage in order to satisfy the %50 rule? ...or am I misunderstanding? Thank you!

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
2mo
It depends on how you define "the mortgage". Rent needs to be at least double the principal and interest, but not double the PITI. The taxes and insurance are being picked up in the 50% expense ratio. Also, please keep in mind that the 50% rule is intended to be a way to quickly rule out properties, not a full underwriting of the cash flow. You'll want to dig deeper into properties once they pass the 50% test.
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