Rule of Thumb: 50% Rule

50% Rule is saying...

All the rent you collect monthly, half of them will be used for expense (PM, maintenance, repair, landscaping, insurance, HOA, etc, all expense except Principal and Interest)

The rest of 50% will be used to pay principal and interest. The left from the 50% after P&I is your cash flow.

This is rule of thumb to calculate if a house worth investment or not.

If you can pass this rule, most likely it is good investment.

For sure you always need to consider PITIVMMA and do accurate calculation.

所有跟帖： 

• 回复：This rule sucks! -Yimusanfendi- ♂ (483 bytes) () 03/09/2014 postreply 07:42:41

• 修理费真是不好说，有的几年不用怎么修，有的一买来就大修，看运气 -清晨时分- ♀ (0 bytes) () 03/09/2014 postreply 07:59:04