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Updated almost 7 years ago on . Most recent reply

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Kyle Smith
  • Boulder, CO
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2% rule for multi-Unit?

Kyle Smith
  • Boulder, CO
Posted

Hello Everyone! When conducting analysis on a rental property, what would be the "2% rule" equivalent for multi-unit properties? Would it simply be 2% per unit? This is what I'm assuming however while compiling all my analysis, I'm trying be as diligent as possible which will enable me to build out a proper analytical system. 

What I mean by 2% rule; If a property rents (gross) monthly for 2% of its value, then it is has good chance that it is too good to be true and there are underlying issues/costs. This is what I've read in David Greene's book "Long-distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties" (so far it is a helpful book for someone learning and beginning such as myself.)

I hope this makes sense, however I'm happy to clarify further if needed. 

Thank you everyone for the help! 

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