2% rule, very unrealistic

[Halukcan Baser]

Hi everyone

I'm not a new member, it's been a while since I registered, longtime lurker here. It's my first post here though.

Anyway let me get into the details.

I'm a real estate investor from Turkey, 24 years old, college student majoring in Management Information Systems.

Came across the 2% rule while lurking around the forum, everyone seems to take that as a basic guideline here. Let me tell you about a property I purchased recently, I bought it for $70k, I rented it out for $500, everyone was like wow thats impressive. If I followed the 2% rule I should of rented it out for $1400! That equates to a gross rental yield of 24% How do you guys achieve this in the states, cause if its that easy I'm packing my bags and taking the next flight to USA. Screw the 2% rule, im happy to settle for 1% Let's say I have $1 million to invest in cash, can I get a return of 150k a year with this money, after taxes and everything?

Right now I'm a tenant paying $900 a month in rent, the sale value of the house I'm renting is $300k, which equates to a gross rental yield of 3.6%

Best Regards

[Steve L.]

The US is a big place with many different areas. In high-end LA, New York, San Francisco, etc you probably would end up with the 0.2% rule and be happy.

In Ohio and Detroit you end up with the 2-3% rule. The problem is rent is so little and many of the fixed expenses don't change. A roof in Ohio isn't much cheaper than in California.

Good luck.