All Forum Posts by: Zachary Waldis

That being said, we currently have two rental properties (student houses) that are operating at a 9% cash on cash return and they meet neither of these rules. So know them, but don't live by them.

The 2% rule: monthly rent should be 2% of purchase price of a property. If you buy a SFH for 100,000 then it would have to rent at 2,000 per month to meet this rule. The market sets the rent but you would use this to try to determine how much to pay for the property. Not a hard rule though. Check this out:

https://www.biggerpockets.com/renewsblog/2013/04/1...

50% rule: your operating expenses and vacancy will be roughly half of the rent. If that property is renting at 2,000 each month, then you can guess-timate that 1,000 will be needed each month to make up for vacancies and repairs, etc.