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One Percent Rule
Fifty Percent Rule Estimate
Two-Input Ratio Deal Analysis Cash Flow Deal Screening

Two Percent Rule

Does monthly rent equal or exceed 2% of property value?

Example Result

Sample Data
0.74%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Two Percent Rule Formula

At Purchase Monthly Rent / Purchase Price 0.74%
Over Time Current Monthly Rent / Current Property Value 0.74%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a two percent rule of 0.74% at Purchase (Month 0). The 2% rule identifies exceptional cash flow opportunities. However, properties meeting this threshold are typically in lower-value markets or neighborhoods, which may come with higher vacancy, maintenance, and management challenges.

Where This Value Comes From

Two Percent Rule is not entered directly — it is calculated from Monthly Rent and Property Value. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Two Percent Rule

Platform Distribution

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Why It Matters

The 2% rule identifies exceptional cash flow opportunities. However, properties meeting this threshold are typically in lower-value markets or neighborhoods, which may come with higher vacancy, maintenance, and management challenges.

Detailed Explanation

The 2% rule is a more aggressive version of the 1% rule, checking whether monthly rent is at least 2% of property value. At purchase, Property Value equals your Purchase Price — making it a deal screen for high cash-flow potential. As you hold the property, both rent and value change, and this ratio tracks how your rent yield evolves relative to market value. Properties meeting this threshold are typically in lower-value markets and may carry higher vacancy or management risk.

Discussion

Same consideration as One Percent Rule — showing the actual percentage rather than True/False would let investors see how close (or far) they are from meeting this aggressive screening threshold.

Example

Sample Result
No

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

Related Calculations

Years Owned

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Time elapsed since the property was purchased, calculated from the purchase date to today.

Profit If Sold

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Net profit if sold today, based on actual years owned.

Return If Sold

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Net sale profit as a percentage of initial cash invested, based on actual years owned.

Total Cash to Close

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Cash needed at the closing table to acquire the property.

$88,550 Example

Total Cash Invested

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Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.

$110,830 Example

All-In Cost Per Unit

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Total acquisition cost (including closing and rehab) per unit.

$396,550 Example

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