From Coach Chad Carson…
“The one percent rule is an analysis tool used by real estate investors to quickly screen potential rental properties. I briefly covered the one percent rule in How to Run the Numbers Using Back-of-the-Envelope Analysis. But in this article I’ll go into more depth about what it is, when to use it (and when not to!), and why it can be helpful. I’ll also address the one percent rule in high-priced markets. There are times when it makes sense to break the rule, but there are also risks to doing that.
More than anything, the one percent rule is about using income discipline when buying investment properties. The mindset of disciplining yourself to only buy real estate investments that meet certain income criteria will help you make more money and avoid common investing pitfalls.
Let’s get started.”