Rules to Buy and Holds

[Zach Smith]

Looking to get my first buy and hold property. Do most people buy and go by the 2% Rule? What would the circumstance be to buy a property using the 1% rule? 

Thanks!

[Mike McCarthy]

@Zach Smith YOU need to figure out what % rule makes sense to you and your area.

Many people are happy with 1% or even 0.8%. But if you’re buying $60K properties, the 2% might make more sense since you’ll need more of a percentage profit to make actual dollars.

You really need to do the long-form math. See what closing costs, carrying costs, repairs, property management, etc will cost you in your area and then make the %rule based on that. You’ll find it changes a lot based on area, what’s available, and how much tings cost.