All Forum Posts by: Saba Motakef

Appreciate everyone’s insights, thanks guys!

I am bit of a beginner located in Southern California and was looking at rental properties in the Orange County area. I am having a hard time finding properties that satisfy the 1% rule (whereby monthly rent should be >/= 1% of purchase price).

Most decent properties are at least $500-600,000, and these properties are unlikely to rent for more than $3K/month in this area. Many resources have suggested using the 1% rule to analyze rental properties, but most properties are closer to 0.5-0.75% in this area. Any thoughts on the 1% rule in this type of market? Is this a hard and fast rule or is some flexibility allowed in different markets? In this situation, would it be better to place a larger down payment to ensure that my mortgage payment is low enough to ensure that I am cash flow positive?