First Rental Property

First Rental Property

Member since 2024 · 5 posts · 0 votes

Does the guideline for a monthly rent between 0.8% and 1.1% of the property's value include power, water, gas etc.?

I am currently looking at a few locations/properties though Zillow, redfin etc. to get an idea of the rent/cash flow potential in the surrounding areas. 

If for example a home is selling for $225,000 it will have an estimate of $1,462/month.

With 25% down the calculator shows: 

$1,023 per month 

Principal and interest $806
Property taxes$125
Homeowners insurance$92

How can I get a better idea of the total including everything? 

Or would you just rent it out between 0.8% and 1.1% ($1800-$2500), taking into consideration the surrounding areas rent, making sure it turns a positive cash flow?






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  • Ko KashiwagiPro Member
    Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
    2y

    Hi Taylor,

    The 1% rule is supposed to be a measure of rent, not the PITI. A 1% rule just means the property rents out for 1% of the value, so 2,2500/month in this case.

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