The 1% Rule: Be Sure to Compare Apples to Apples

ROI Wealth Watch

Many new investors get caught up in the hype of the 1% rule. It's easy, after all, to think you'll be guaranteed great cash flow when your rent is at least 1% of the property's investment price.

But finer details make the real difference in investing, and the 1% rule can be relatively useless if you don't use it correctly. Today, Jared and Tom discuss the importance of comparing data from similar properties; that way, the 1% rule stays effective and accurate.

"All things are not equal when you're just looking at the 1% rule.” -Jared Garfield

In This Episode of ROI Wealth Watch:

• The basics of the 1% rule and how it affects investors
• How to know when you're comparing apples to apples instead of apples to oranges
• Why property taxes can make or break an investment
• How to ask property management companies the right questions
• The true solution to the 1% rule's dilemma of inaccuracy

Wealth Watch Words of Wisdom:

• Compare market economics, including property taxes, vacancy rates, and population growth.
• Compare demographics. Make sure crime rates, education levels, vacancy rates, etc. are similar when comparing apples to apples.
• Compare property classes. Consider renovation prices, neighborhood grades, etc.
• Compare property management companies. Ask each company about specific fees and stats.
• It's all about net cash flow. The 1% rule is a great start, but it's not the only think you should think about.

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Thanks for tuning into today’s episode of the ROI Wealth Watch podcast with Jared Garfield - your resource for learning to buy real estate in the right markets at the right times. If you enjoyed this episode, head over to iTunes to leave us a rating and review. Subscribe to the show so you never miss an episode, and visit our website to grab your free gifts!

And, if you’re looking for the best turnkey rental properties to invest and renovate to maximize your real estate portfolio, visit the Rich Life Real Estate website to view turnkey rental opportunities or speak with an investment advisor for more information.

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