If you want a more balanced combination, so if you want to make sure that you have a reasonable amount of rental income,

and you also want to speculate and make some money on price appreciation,

the goal then is to find properties in good locations that also meet the 1% rule or some other income measure. Welcome to the real estate and financial independence podcast.

I'm your host Chad Carson.

You can also call me coach,

and this is a show all about helping you get out of the financial grind

so you can do more of what matters.

Whether you're a long-time listener or a first-time listener, thank you for being back for another episode. The title of today's episode is the 1% Rule, Quick Math for Positive Cashflow Rental Properties. So if you've never heard of the 1% Rule, it's a formula to help you quickly analyze a real estate deal. And so I'll explain exactly what it is, how you can use it, how you should not use it in this episode. If you are someone who knows what one percent rule is, be a little skeptical about whether it's applicable in today's market, high prices, things going on, things changing. You know, why should you even think about the one percent rule? I've got you covered there too in this episode. It's an in-depth look at the 1% rule. Many of you may know that you can see my background if you're watching on YouTube. I'm still in Spain. And so this fall, I've been sharing with you some of my best of Coach Carson podcast episodes. This is one of the most downloaded episodes of all times in the top 10. So I wanted to bring it back to you and share it with you. Later on in the fall,

I'll be making some new content. But as I'm transitioning here, I'm learning Spanish, trying to become fluent in Spanish. I'm also writing a book called The Small and Mighty Investor. And so I'm taking a little bit of break from new content here on the podcast, but I will be back with more content later in the fall. But for now, I hope you enjoy the episode. Now, the 1% rule is an analysis tool

used by a lot of real estate investors to quickly screen potential rental properties. Now, I've got to say

up front, this is not the end-all be-all of real estate analysis. I'm going to have some other

episodes where I go into much more depth on some other tools that I like to use,

like the cap rate, even using a spreadsheet. But I wanted to get this topic early on because I think it's very

useful as a quick first pass at analyzing real estate. Something you can, after you listen to this,

you can use it right away if you start looking at some properties today.

And so in this article, I'm going to go into depth about what the 1% rule is, when to use

it, and also when not to use it, and then explain why it can be helpful with some examples.

I'm going to also address the 1% rule in higher priced markets.

There are times when it makes sense to maybe break the rule.

And so, but there are also some risks to do it in that.

So I'll give you some examples of that.

More than anything, the 1% rule is about a habit of income discipline.

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