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Updated about 10 years ago on . Most recent reply

User Stats

64
Posts
9
Votes
Robert M.
  • Investor
  • Atlanta, GA
9
Votes |
64
Posts

Is 50% Rule (Guideline) still relevant in your market

Robert M.
  • Investor
  • Atlanta, GA
Posted

Hi Everyone....Tax season is great to reflect and really dig into your numbers!  I have found that my expenses are creeping up year on year and revenues remain relatively flat.  Atlanta Market

Property taxes have doubled for me over past 2 years so I think this is primary cause.   I am now considering 60% as a guideline not 50% when evaluating properties.

Thoughts?

Most Popular Reply

User Stats

659
Posts
536
Votes
Steve Olafson
  • Scottsdale, AZ
536
Votes |
659
Posts
Steve Olafson
  • Scottsdale, AZ
Replied

The 50% rule is non-sense.  Every area has different levels of income and expenses.  You might get lucky if you use this tool and happen to live in an area with that matches but the odds are that you don't.

Some places rent for $2000 per month.  Other places rent for $500.  You could live in an area of high insurance and taxes or low insurance and taxes.

You could also own a property that has high turnover.  Or, you could be in an area that people rarely move from.  This all has an affect on expenses and needs to be factored in.

The 50% rule never made sense.

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