What's a good deal / the average 1% Rule output in YOUR market?

[Chace Fraser]

I don't know about you, but I'm a numbers person. And with all the new properties that come to the market, I use the 1 percent rule as my "back of the envelope" calculation to see if a deal is worth looking deeper into. 

But this begs the question, what is a good deal IN MY MARKET? If you didn't know, the output of this calculation will be HIGHER in high cash flow markets (think midwest) and that is why it was first dubbed the "2 percent rule". The output will be LOWER in high appreciation markets due to the disparity between rents and purchase price. The more expensive cities (ie west coast and east coast cities) will have more appreciation, less cash flow, and a lower output. 

To figure this out, I've collected all sold data for multifamily properties in my market for the past 2 years (over 1,300 properties). This has allowed me to "see" what the average output is in each city, zip code, school district, or whatever I want to search.

Here are some of the outputs at current rents and the current asking price...

Portland, Oregon: 0.60%

Beaverton, Oregon: 0.58%

Hillsboro, Oregon: 0.64%

Vancouver, Washington: 0.60%

If a property comes in under this number it doesn't mean the deal isn't worth pursuing... it just means that there better be a good reason that makes it so. For example, you're house hacking and looking for a property in a good school district.

So, for anyone out there, what's the average output in your city?