2% Rule on SFR

[Samantha M.]

Basic question about the 2% rule on SFR, which states rent must be 2% of the properties purchase price.

Is the 2% based solely on the purchase price or does it include repairs as well. For instance.

1) Purchase Price (50k x .02) = 1,000 minimum rent required
or
2) Purchase Price + Repairs (50k + 20k = 70k x .02) = 1,400 minimum rent required

Thanks for clarification