The 1% Rule - The monthly rent earned on an income property should meet or exceed 1% of the total buying price of the property.
How accurate/important is this rule when it comes to personally investing in income properties? In my geographical area, that would be a ridiculous amount. The average 3 bedroom starter home (selling for $150,000) around here rents at $900 month. Barely over half of the "1% rule".
Similarly, a $300,000 downtown condo, would rent for about $1500/month. If local home prices/rents barely exceed half of this "1% rule" would that mean it is a poor area for income property investments?