1%- 2% rule in Boston area

[Mark McDonough]

I’m new here and am still in immersing myself in all the BP Blogs and pods. Just wanted to ask some experienced investors about the 1% or 2% rule. I know it’s more of a guideline than anything, but is it a realistic model these days for properties in the greater Boston area?

The more and more I research, the more discouraged I get about jumping in. I don’t want to pull the trigger on a deal just for the sake of making a deal. Breaking even/ hoping for appreciation makes me nervous.

A few years back it may have been a

different story, but now I have my current home and 2 kids to consider. Thanks for any feedback

[Charlie MacPherson]

@Mark McDonough The chances of finding even a 1% property inside RT 128 are virtually zero.  Normal rent:price rations in Boston and surrounds run 0.5% - 0.8%. 

A lot of people buying these properties are counting on appreciation more than cash flow.  I'm not convinced that's a great idea.

There are some places inside the I-495 belt, more south than north or west.  You should find 1%-2% candidates in a few of these locations:  Plymouth, Kingston, Middleboro, Taunton, Brockton, Fall River and New Bedford. 

Decent deals are EXTREMELY competitive.  Be prepared with a proper pre-approval so you can write an offer as soon as you see a good candidate.  Ideally, before the first open house.