The 1% Rule and Phoenix, AZ

[Daniel Pitner]

Hi Guys, 

My wife and I are actively submitting deals on SFR properties that we plan to live in and then, a few years down the road, rent out. The issue we are running into is that we are having a difficult time finding properties that come anywhere close to the 1% rule. My question for other Phoenix investors is how closely do you stick to the 1% rule? Do you find the market to be in a place right now where it is not possible to get these numbers?

[Scott Anderson]

Originally posted by @Daniel Pitner:

Hi Guys, 

My wife and I are actively submitting deals on SFR properties that we plan to live in and then, a few years down the road, rent out. The issue we are running into is that we are having a difficult time finding properties that come anywhere close to the 1% rule. My question for other Phoenix investors is how closely do you stick to the 1% rule? Do you find the market to be in a place right now where it is not possible to get these numbers?

 I think I got a great deal at .75% rule.

I didn’t use any rule at all only a self made spreadsheet calculator. Only calculated a rule after the fact out of curiosity. 

That said, you can’t calculate rental income today if you’re not renting until later. It skews your numbers. If I calculated my current house it would have been .5%. Three years later it’s 1%.

Stay away from rules, use numbers. Buy numbers that make you happy.