Rental property: less than 1%

[Donna Matessa]

New to the forum.  We put an offer on a townhome in an area close to us and like the townhome area.  There's 3 townhomes in each building.  Our realtor gave us the average rents in the area and it would be closer to .7%.  It will cash flow a little.  Main question is what is the lowest percentage you will go for rental properties before you consider buying.  We've had good appreciation in Raleigh so it's a very active market.

[Adam Schneider]

@Donna Matessa A good Rule of Thumb is to not let these REI Rules of Thumb interfere with your analysis of a deal. Put pen to paper, see if the cash flow, appreciation, risk, reward all work for you or don't work for you. The 1% rule is just a spitball way to look at a deal on the surface very quickly. With townhomes, your due diligence should include checking on the financial stability of the HOA, and if the HOA covenants restrict rentals.