How does the 1% rule of thumb work?

[Account Closed]

I understand for the most part how it work when using the example for $100,000 house.

Does anything in the month change if the house is worth

$176k to $194?

Rent is $1350

[Brandon Roof]

1% of $176k and 194k would be $1,760 and $1,940/month in rent, respectively, well above your $1,350, meaning the 1% rule isn't even close in this case.  I wouldn't go by the 1% rule anyway because it rarely leads to the outcome an investor is looking for.  It may have at one point, and may still in certain markets, though if you spend a little more time in the forums, those opportunities seem to be few and far between or are in questionable neighborhoods, usually not on $150k to $200k houses.