1 Percent Rule for Investors
The 1% Rule is a popular guideline used in real estate investing to assess the potential profitability of a rental property. Essentially, this rule suggests that the monthly rental income of a property should be at least 1% of its total cost, which includes the purchase price and any necessary repairs or renovations. For instance, if a property costs $100,000 to buy and requires $10,000 in repairs, the total cost becomes $110,000, and the monthly rent should be at least $1,100 (1% of $110,000) to meet the 1% Rule. Keep in mind, however, that while the 1% Rule can be useful, it's important to take into account other factors such as location, vacancy rates, and maintenance costs when considering an investment property.
