All Topics / Help Needed! / Question about the 1% Rule

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  • Profile photo of BayerBayer
    Participant
    @bayer
    Join Date: 2010
    Post Count: 19

    Hi all

    I have a question about Steves 1% Rule in his book. I am at the moment at the very begining of my self educating process of investing and am just having fun looking at rental incomes against property prices.

    My question is using Steves 1% rule, if I have the 20% deposit for a property should I be changing the maths from annual rent devided by asking price x 100      to annual rent devided by 80% of asking price x 100 to work out if a property has the potential to have a positive cashflow.

    Thank you in advance

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    Hi,

    Thanks for your post and welcome to the community.

    No – the 1% rule assumes that you are leaving a 20% deposit.

    Regards,

    – Steve

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of BayerBayer
    Participant
    @bayer
    Join Date: 2010
    Post Count: 19

    Thank you Steve I appreciate the help

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