Question about calculating operating expenses on condos

[Kevin J.]

I am interested in how operating expenses are calculated on condos with fairly high HOA fees. For people who use the 2% criteria as in Mike Rossi's book, "1 Minute to Rental Property Riches" I know operating expenses usually average out to be around 50% of the gross rent on properties under $50,000. My question is does this formula still work with condo's that have high HOA fee's ($200-$300 monthly)?

Here's an example:
I have found numerous condos for sale in my area (Phoenix AZ) for $30,000 -$35,000 (price includes any repairs) that rent for $700 a month. This definitely meets the 2% criteria, but the HOA fees are $250 a month. Does the 2% criteria account for such a high HOA, or would the operating expenses be greater than 50% in cases like this.