The 0.5% rule...Can you be successful?

[Kyle Scholnick]

I live just outside of Washington DC where I would say the average home price is about $475,000. 

Based on the going rate for rents, for $475,000 house I probably won't be able to get more than $2800 in rental income for the month.

Can these numbers ever work out?

I am well aware I am missing some information here about a general analysis of the property but I'm just speaking in general terms. 

Not sure if this makes a difference but this is a stable area, even in 2008 prices only dropped by about 20% from what I hear.

Also I was looking into living in the house I rent out as wellfor now but eventually will move out and that will be just a rental.

What do you think, do you always have to abide by the 1% rule?

[Brandon Hall]

Kyle Scholnick I live in DC and feel your pain. You have to realize that DC is not a cash flow market, unless you are acquiring apartment buildings. DC is all about appreciation and value add flips. If cash flow is your strategy, I'd look in other markets. It's too pricy and too competitive for us cash flow guys to thrive here.