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Started By
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re: How to get into rental property?
Posted on 3/19/23 at 9:41 am to Silverback911
Posted on 3/19/23 at 9:41 am to Silverback911
quote:
Is there some type of formula or margin when calculating payments and then rent?
When I was starting I used the 2% rule and crushed it. Any IQ can comprehend this and be successful.
In this market, I think you will be using the 1% rule.
For example, take your ALL in cost (every dollar you spend to purchase and get the house ready to rent) and multiple that by 2%. That is the price you have to rent it for.
If the market does not support that price, it's not a good investment.
This is a fool proof way for a beginner to get started and be successful.
2% deals are impossible to find now.
4
Posted on 3/19/23 at 10:01 am to I Love Bama
Is going 1% even worth it?
Posted on 3/19/23 at 10:57 am to I Love Bama
Can you give an example of the two percent rule? For example, payment, insurance, and property taxes are 1k monthly, does this mean I charge $1,200 a month?
Posted on 3/19/23 at 11:03 am to I Love Bama
2% rule is an amazing deal. Usually for a bad part of town. 1.5% is on the money in this market. 1% is tight in this market!
But I can’t agree with Bama more!
I started last year and am going to try to retire in 10-15 years
But I can’t agree with Bama more!
I started last year and am going to try to retire in 10-15 years
Posted on 3/20/23 at 7:38 pm to I Love Bama
quote:
For example, take your ALL in cost (every dollar you spend to purchase and get the house ready to rent) and multiple that by 2%. That is the price you have to rent it for.
So
is this an accurate example?
Property sale price : 200,000
My “spend” -
Down pay : 50,000
Annual “spend”
Insurance: 3,000
Tax : 1,500
Annual mortgage: 12,000
Maintenance 3,000
Advertising 500
Total annual spend 70,000. X 2% 1,400/month or 16,800/year.
That is a return of 33.6% on the down payment and 84% on the annual “spends”
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