Do you use the 1% rule on your rentals in 2023?

[Noah Bacon]

What is the 1% Rule in Real Estate? 

The 1% rule is a real estate investment guideline indicating the minimum monthly rent you must charge your tenant to break even on a rental property. The rule states that your rent should be at least 1% of your property’s sale price.

The 1% rule or guideline is a helpful tool, but should not be your main metric of success when analyzing an investment property. This guideline has shifted over the years as property values and interest rates have increased, but the guideline should be a good initial indicator if a property will or will not cash flow.

If you are looking for more information about the 1% rule or alternative analysis metrics commonly used in real estate, go check out 1% Rule In Real Estate: What It Is And How It Works!

Do you still use the 1% rule when running the numbers on a property? 
Are your properties currently meeting the 1% rule? 

[Melissa Nash]

To clarify- if I am buying a property finished- (turnkey) at market value I can cashflow and average of 9-12% year 1 on a B class property and I am not at 1%, If i wanted to buy a finished property in a C/D class then I can get to 1% rule. But I personally value buying property in an area that appreciates more and has the potential for better tenants and rental increases, so I will easily give up the idea of the 1% rule, as I think future growth is much more important to me.