Is the 50% Rule still doable?

[Evan Swanson]

Even with a competitive mortgage rate, the duplexes near me in lower-income areas do not pass the 50% rule. Can someone take a look at my logic below and let me know if I'm using the rule correctly? I know it's just a rule of thumb and that exact numbers need to be used, but I'm unable to find 1 property that meets this "rule of thumb." 

For example: 

Purchase Price: 255,000

DP: 12,750 (5%) 

Interest: 5.05% (also, with this specific product the bank covers the PMI)

Total Monthly Payment (mortgage and insurance): 1,584 

Market Rent: 1,200 

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Total monthly income = (1,200/unit * 2 units) = 2,400 

If 50% (1,200) is allocated towards operating expenses (non-mortgage/insurance), then only 1,200 remains for the mortgage expenses. 

If you have found a move-in-ready property that meets the 50% Rule, please share! 

[Scott Trench]

I bet you that this will change within the next 12 months and the 50% rule comes back into play. When interest rates are as low as they were for the past few years, that means that the rent to price ratios (or a 50% rule of thumb) can be way out of whack, and cash flow can still be achieved. But as interest rates rise, rents will increase faster than prices, and these rules of thumb will come back into being useful.