50% rule for single family properties

[Mark Laird]

Just curious if the 50% rule is accurate for single family residences or is that more a rule of thumb for multifamily properties? Does anyone who invests in single family residences out of their area, like a different state, think the 50% rule is a good ballpark figure?

[Chris Martin]

Welcome to BP!

For SRF, the 50% rule of thumb pretty much works. Your numbers will vary most likely... 45$ to 55% for example. There are a bunch of topics on the 50% rule of thumb on BP. A few notable ones:

https://www.biggerpockets.com/forums/311/topics/113694-50-percent-rule-in-my-world

https://www.biggerpockets.com/forums/48/topics/227168-50-rule-fiction-non-fiction-lets-see-for-37-491-sfr

The second link looks at a SFR hedge fund and their numbers. Their operational expenses were 51.6% across 37,491 single-family properties in 22 states.