Cleveland and the 1% Rule

[David Leggett]

I just wrote an in-depth blog about the 1% Rule and the Cleveland Market and I was curious to get some feedback on whether investors still stick to the 1% Rule or if it's an outdated investing metric.  There are a lot of great properties in the Cleveland market that fall into the 1% rule and seems to me like a good baseline metric for identifying good cash flow properties, but doesn't quite tell the whole story.  There are also great investment areas in this market that don't fall into the 1% rule, but are in nicer neighborhoods that will get high rents and good appreciation. 

I wanted to know what you think about the 1% rule and what are some metrics that you've found success using in this market, and your own.  Look forward to hearing your feedback!

[Brian Garlington]

I went a step further for Cleveland. After flying out there a number of times I started to look for 2% Rule on properties with Section 8 tenants in them in C areas. By far my best performers out there are exactly that. I also have 2% rule properties out there with cash tenants. Guess which ones are the most high maintenance, non paying tenants. Hint: It's NOT the Section 8 tenants.