Hello from Mass and 2% rule question

[Stephanie Sellers]

Hi, I'm a newbie from central Massachusetts hoping to have my first deal to fix up this winter. I've been practicing at analyzing deals and I'm wondering if the 2% rule (where the possible rent should equal about 2% of the purchase price), should be the actual purchase price of the deal or the purchase price plus the immediate repairs you will have to make in order to make it rentable?

[James Gregory]

I'm no expert, but in my opinion, it would be the later. Once all repairs have been completed and the property is ready to rent. Then your rent should be 2% of final cost to you.