There are lots of rules for this, so I don't think it is for the average investor.   

Thank you for sharing this win @James Cool!

I live in New Jersey and would like to make this a medium term rental.

but, we only know what you posted.hope this helps

Either can work, or either can be a huge pain, but that's the reality of common area ownerships.I've worked on some small 2-3 unit condos like this doing the condo plans and the CC&Rs have always included provisions for financials, budget etc. as well as dispute resolution.

This is known as "margin".

If I could find a duplex that sells at that number and is rent-ready, I'd actually be pretty close to 2%.The problem is that if I inverted my analysis and said, "Hey - this hits the 1% rule!"

This is not tax or legal advice.

Do you consider worst case scenario and base your potential offer based on this? 

Been through a few book keepers who don't seem to understand this space very well.