General Landlording & Rental Properties
Market News & Data
General Info
Real Estate Strategies
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hospitable-deef083b895516ce26951b0ca48cf8f170861d742d4a4cb6cf5d19396b5eaac6.png)
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_trust-2bcce80d03411a9e99a3cbcf4201c034562e18a3fc6eecd3fd22ecd5350c3aa5.avif)
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_1031_exchange-96bbcda3f8ad2d724c0ac759709c7e295979badd52e428240d6eaad5c8eff385.avif)
Real Estate Classifieds
Reviews & Feedback
Updated about 2 years ago on . Most recent reply
The 2% Rule in Today's Real Estate Market - Is It Still Relevant?
Hey BP,
As we know, the 2% rule is a widely used guideline in real estate investing, which states that the monthly rent should equal 2% of the property's purchase price. This rule is often used as a quick way to evaluate the potential cash flow of a rental property.
However, with the recent changes in the real estate market, many investors are questioning whether the 2% rule is still relevant. On one hand, rising home prices and interest rates are making it more difficult for rental properties to meet the 2% threshold. On the other hand, the strong demand for rental properties in many markets is leading to higher rents, making it easier to meet the 2% rule.
So, is the 2% rule still relevant in today's market?
Most Popular Reply
![Jaron Walling's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1076358/1652275593-avatar-jaronw2.jpg?twic=v1/output=image/cover=128x128&v=2)
**Raises hand in the back of the room**
We purchased on/off market cash-flow properties in C/B- neighborhoods for the last 5 years, and exactly 0 opportunities met the 2% rule. It's not impossible but it's extremely challenging to find. It's not a relevant in today's market.