1% Rule for Evaluating Properties

[Aaron Cox]

I am extremely new to this world and trying to figure out how to analyze potential properties.  I keep hearing and reading that your monthly rent should be 1% of the purchase price to ensure that the property cash flows.   In theory I understand this, but have run into an interesting question.  In looking at turnkey properties the rents are routinely less than 1%.   Does this mean that these properties are not suitable cash flowing investments?  Is there another calculation that I should be looking at to ensure that the property cash flows?  I understand that you have to look at total monthly costs, including cap ex, mortgage pmts, insurance, vacancies, taxes, etc.  Seems like there is something I am missing if the rent payments for these properties are less than 1% of the purchase price.  All of their marketing materials say that these properties cash flow.