1% Rule, Am I missing something?

[Joas Espinoza]

So I know that the 1% rule states that your property’s monthly income should be approx 1 percent of the purchase price.

However, let’s say I purchase a single family home worth 600k. Wouldn’t it be a little absurd to claim $6,000 rent? Assuming that no rent increases occur. How would this amount even be justified?

Or does this rule only apply to multi family properties?

[Joshua Noth]

@Joas Espinoza 

To directly answer your question: unless you have an incredible SFH in a great renter's market, 6k rent would be a lot.

The 1% "rule" is really more of a 1% "guideline". It's simply an indication of whether or not a property should cash flow or not. It's not required by any means, and in some markets may be next to impossible to achieve.  If you can hit it, fantastic! If not, you may be aiming for other metrics, such as appreciation.