Buy a house for $120,000 an rent it for $1200

[Tanya Smith]

Hi Friends! I have been analyzing deals ALL OVER the area I live and can't meet this 1% Rule... Where can I achieve this rule without buying in war-zone areas? 

I have noticed there are people saying they only buy properties with the 2% rule which in this case would be buying a home for $120,000 and renting it for $2,400.. Where are these numbers working for all of you as investors? Thanks in advance for any and all advice!

[Jay Hinrichs]

2% rule is old news.. and only works in very select markets and usually for locals who can deal with those asset class's they tend to be inner city.. or very rural middle america.

1% is achevalbe in virtually every turn key market and you can buy nice stuff with the 1% rule 100k homes to 120k homes in those areas are pretty nice and rents will be right at 1% or maybe a tad better.

I always suggest folks buy the best they can and do not get tempted to buy sub 40k rentals out of state ( mid west northeast or deep south) unless they are in tiny little bergs that are not full of crime. they have other issues. like very low wages but crime is one the real killers to cash flow homes. Your house gets hit once it can wipe out years of cash flow.