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I finally bought into that viral '1% rule' for real estate investing after ignoring it for 3 years
I always thought the 1% rule (monthly rent should be 1% of purchase price) was just a lazy shortcut from online gurus, but after running my own numbers on a duplex in Phoenix that returned 1.3%, the math actually held up better than my gut feelings. For those who rely on it, what's the worst deal you've seen that still passed the 1% test?
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wilson.olivia3mo ago
Heard this EXACT same story from my friend Sarah last month. She bought this rundown fourplex in Tampa that barely hit 1.1% and thought she was being smart. Turned out the place had knob and tube wiring in two units and a foundation crack that cost her 18 grand to fix before she could even rent the place out. The 1% rule TOTALLY ignored all the capital she had to pour in just to make it livable. She's been holding it for 8 months now and the numbers still don't work because the expenses are way higher than her spreadsheet predicted. That rule is just a starting point but it hides so many problems until you're already in deep.
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brooke_taylor443mo ago
Yep, but that rule is just the math before you discover the mold.
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corah753mo ago
Our last flip had the same hidden costs, brand new roof needed before we could even list it.
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