Rental 50%-Rule vs 30%-Rule on a SFH

[Eric Gamble]

As an REI that primarily buys in cash, would my opportunities be taken seriously if I used and commuicated my 30%-Rule assumption?

I am looking at wholesaling some properties in a highly desireable area.  However, whenever I do my analysis with the 50%-Rule, I cannot get close to a number that would work for all parties.  If I run the same analysis, using a 30%-Rule, I might get EXTREMELY busy (and that is what I want).

The 50%-Rule is a rule of thumb that says take 1/2 of rental income and allocate it to expenses.  This is a very good practice when the landlord is responsible are ALL utilities and the like.  However, with a single-family home, especially in Class-A/B neighborhoods, the tenant covers all of their utilities and as for insurance the landlord probbaly has an umbrella policy on the property.

Many thanks,

-Eric