Following the 1% Rule in SL, UT and Surrounding Counties

[Matt Quinney]

I understand the 1% rule as it applies to charging rent but it seems unrealistic in our neck of the woods. In my neighborhood we had a home recently sell for $465,000 but there is no way you could ever charge $4650 for rent in order to meet the standard. What is reasonable for this market? Is there a different philosophy to make sure one is getting into the right deals? Should I be more focused on making sure the rent supports a 1-2% true cash flow approach?

[Louis Davis]

@Matt Quinney Typically you will have renters insurance and home owners insurance on the house to account for unexpected events. $500/month would be great ROI depending on the purchase price. I know investors where if they are making at least $250/month on the property they are happy. FYI, I never buy at full value. Always start with the purchase in profit.