We hear a lot about “The 2% Rule” (or, as The Book on Rental Property Investing calls it, “The 2% Test”). For our benefit, I would like to create a local forum discussion (THIS forum discussion) that documents our investing experiences here in Omaha. My intent is to have an ever-evolving catalog of properties (at the neighborhood level) showing the relevance of this rule of thumb in our city.
This is a controversial topic, and it seems very difficult to pass the 2% Test in Omaha, but hearing each of your real stories will make this locally meaningful.
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If you need a refresher on “The 2% Rule” it is simply this:
MONTHLY RENTAL INCOME / PURCHASE PRICE = X%
Here are a few links:
Youtube video by @Scott Trench (click here)
BP article by @Ali Boone (click here)
BP article by @Mark Ferguson (click here)
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To start contributing toward this database, simply respond to this post with the following:
(1) NEIGHBORHOOD
(2) PROPERTY TYPE (single family, multi-family, etc.)
(3) MONTHLY RENT
(4) PURCHASE PRICE
(5) RENT/PURCHASE PRICE RATIO (%)
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For example, your response might look like this:
(1) Midtown
(2) Duplex
(3) $1,800 (unit one: $800; unit two: $1,000)
(4) $150,000
(5) 1.2%
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Hope this becomes very informative for the Omaha investing community as we start to develop our local rules of thumb.
-Shawn
