10% Rule: How It Applies to YOUR Next Investment Property

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Hello Everyone!

When looking to invest in a new rental property, it can be a challenge to determine the appropriate criteria to filter your potential options. A commonly used tool is the “10% Rule”. This simple mathematical formula can provide insight into whether you should pursue this particular property or not. Let’s break down these steps:

  1. Determine the average monthly rent of the prospective property.
  2. Multiply the average monthly rent by 12 to get the average annual rent income.
  3. Divide the average annual rent income by the asking price for the property.

If that number is equal to 0.10 or 10% or higher, then that property is worth pursuing. Any number that falls below 10% would indicate minimum return and can be crossed off your list, in the pursuit of more favorable opportunities!

As always, feel free to contact Secure Pay One- My Landlord Helper with all your property investment needs!

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