What Is The 1% Rule In SFR Investing?
The 1% rule is a profitability benchmark requiring monthly rent to equal at least 1% of the total purchase price.
The one percent rule refers to the rent-to-cost ratio a single family rental investment requires for profitability. Monthly rent should equal at least 1% of the total purchase price for positive returns.
The “2% rule” gained popularity during market downturns when distressed properties could be acquired at deep discounts, allowing for higher rent-to-price ratios.
The information in this article is for educational purposes only and does not constitute tax, legal, financial, or investment advice. Consult a qualified professional before making investment decisions.