1% rule how acurate is this?

[Peter G.]

I know its just a rule of thumb but in my area out of over 50 houses I have looked at 1 of them meet the 1% rule... 99.99% of the houses are selling for 110k-120k and doing 900-1k in rent monthly. I am starting to get frustrated with constantly looking for any that meet or get close to the 1% rule no luck...

[Andrew Johnson]

@Peter G. The 1% rule is just a guideline.  It doesn't take into account factors like property age.  A 2% property that needs a new roof next year and has an HVAC systems on its last legs sure won't feel like a 2% property in 24 months.  It can also depend on where you are looking for properties.  If it's in an area where owners want to live and you're competing with buyers that create an emotional attachment to a home (and thus will pay for it) it can be tough to find what you're looking for.  Rather than focus on the 1% rule I try to look at cash-on-cash return and see how depreciation can help me, deferred maintenance might hurt me, etc.