When should you NOT use the one percent rule for rental property investing? In today’s episode, I encourage two callers to violate the One Percent Rule for real estate that they already own.
WHAAATTTT? Why would I say that? Especially given that I’ve gained a bit of a reputation as The World’s Most Staunch Advocate of the One Percent Rule? (Long title, I know, but someone’s gotta wear it.)
And if you’re not going to use the One Percent Rule, how should you make decisions about your real estate investments instead?
Find out in this podcast episode. Enjoy!
Here’s more detail:
I have a duplex in a great suburb of Boston which is undergoing revitalization and is a magnet for young people. I bought it for $500,000 a year and a half ago, and it rents for $4,100. It cash flows, but clearly not at a good ratio.
I know I can find other properties that hit the one percent rule – triplexes in the same town, or in a different, cheaper market – so I’m thinking of selling. I don’t think the duplex has appreciated much, so if I can only get what I paid for it, is it worth selling? Or should I wait for rents to rise?
I have two rental properties, both with pretty big mortgages on them, but I also want to keep investing in other properties. I read your 2014 article on paying down your mortgage or investing and I loved it, but I was wondering if your thoughts on the subject have changed since you published it. How do you decide between paying down the mortgages on your properties or investing in others?
Also, is there a way to pick which mortgage to pay down?
How do you evaluate a neighborhood when you’re deciding to buy a rental property?
I’ve heard you mention specific zip codes that you like and find attractive, but how do you drill down to a specific couple of blocks within a neighborhood?
I have a dilemma that I need your help with: my husband and I have two properties in two different states that we go back and forth between. For simplicity’s sake, we eventually want to sell one.
One property is paid off, and the other has a mortgage balance of $180,000 (we paid $300,000 for it two and a half years ago). Its estimated current market value is $400,000. I love this property and don’t want to sell it, so I thought: maybe I can rent it in case I want to move back.
Does it make sense to rent this property out if the most I can rent it for is $2,000/month (maybe more, if semi-furnished)?
I own three properties: two are full rental units, and one is a duplex. While I have $30,000 saved for a downpayment on another property, my debt-to-income ratio is too high to qualify for a traditional bank loan.
I want to buy the next property and hold it for a long time – do you have any recommendations for how to secure financing? The only debt I carry are the mortgages on these properties.
I tackle these five questions in today’s episode. Enjoy!
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