The 1% Rule for Income Property

There’s an easy rule to remember when buying investment property. If the rents exceed 1% of the sales price, you should be safe, assuming interest is under 5%. Rates are projected to increase in 2018, so be safe.

Simple Example:

If a property is $200,000, you must make over $2,000 in rent to cover principal, interest, taxes, insurance, repairs and maintenance. This is approximate based on the condition of the property.

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