Enter the purchase price into the calculator to determine the monthly rent according to the 2% Rule.
2% Rule Real Estate Formula
The following formula is used to calculate the monthly rent according to the 2% Rule in real estate.
MR = P * 0.02
Variables:
- MR is the monthly rent ($)
- P is the purchase price of the property ($)
To calculate the monthly rent according to the 2% Rule, multiply the purchase price of the property by 0.02. This will give you the minimum monthly rent that should be charged to meet the 2% rule.
What is a 2% Rule Real Estate?
The 2% Rule in real estate is a guideline often used by real estate investors to determine if a potential investment property will generate a good return. According to this rule, the monthly rent of a property should be at least 2% of the purchase price. For example, if a property is purchased for $100,000, the monthly rent should be at least $2,000 to meet the 2% rule. This rule helps investors to estimate the profitability of an investment property.
