is the 1% rule dead in 2023? No and here's why

[Robert Ellis]

The old tried and true 1% rule. People ask if it's still possible to get this. What I say: "reverse engineer what you want and use data to do so." 

In Columbus Ohio in cash flow zips (class C), section 8 is one good strategy to achieve 1% rule. Working with an experienced property manager who manages section 8 is also important. Bedroom count is typically the biggest driver of section 8. How do I find out what section 8 will pay? 

The Columbus Metropolitan Housing Authority posts this. You can also talk to an experienced property manager who can tell you what they are too. Here is the chart:

So if you look at properties available at less than $156k per unit, you would be hitting the 1% rule and also less than 52k per bedroom. As of this posting, there are properties like this that are currently available with month to month tenants in 43211. Some less than $200,000 even. That's an easy way to see how that goes. 

[Marc Rice]

Great share. Do you know how to calculate the "utility portion" of the rent that section 8 then deducts from the table you listed above to get the "net rent" amount? I'm curious on how that varies by bedroom count.