50% and 2% rule and just bought a rental

[Brandon Redfern]

I discovered BP several weeks ago.  I had mainly been listening to the podcast and hadn't heard some of the rules that I've been reading about on the forums the last few days.  I have 4 rental properties that probably never met the 2 rules above (as long as I understand them correctly).  But I feel like they've been great long term deals (which is my goal).  I make close to $300k and do not need cash flow, just hoping to slowly build long term wealth. 

Well I just put a bid on a rental property here in Greenville and won it. $165k for a 1721 sqft SFR. It is in great shape (built 2002) and I believe I will get at least $1450 a month but hope to get $1600-$1700. The house is in a great school district and I believe the maintenance costs will be low. It's 5 min from my house so I won't use a PM company (I don't use them on any properties, I've been extremely lucky I guess). Because it's an investment property the taxes almost triple and I believe my payment with the escrow will be about $1050. I guess I've always just loved the idea of someone paying off my property long term and haven't worried too much about much else, as long as I'm in the black (but of course prefer the green and always have been) then I've been happy. Also there aren't too many single family homes like this that go for less than $200k and I believe this market is a phenomenal one, both rental and growth.

Reading on here kind of makes me question my approach so I'm just looking for feedback and pushback. 

[Brent Coombs]

@Brandon Redfern, basically, the 2%/m "rule" is for people who DO need the cash flow. There are always markets where 2%+ is achievable, but usually in areas you wouldn't want to live yourself! 

People like you on the other hand are ever worried about the dreaded T word. I'm not aware of why it would be true that for "an investment property the taxes almost triple". Is that true? I thought you just pay your marginal tax rate on any net rental profits. Am I wrong about that?

Anyway, at $300k/y, YOU can afford to buy where you like, rather than searching out for 2%/m.

Good for you. Cheers...