This is Better Than the 1% Rule (New Real Estate Rule)

Episode #1325

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*The rules of real estate investing have changed.*

For years, investors were using the *one-percent rule* to quickly determine if a *real estate deal* would *cash flow.* But the one-percent rule, rent-to-price ratio, and other common rules of thumb have a glaring blind spot. They account for *purchase price,* but they _don’t_ account for *expenses.*

Meanwhile, *mortgage rates, taxes, and insurance* have all risen across the board — *expenses that can easily kill your cash flow.*

So, Dave’s come up with a _new_ rule of thumb you can use to *quickly analyze rental properties and markets.* He’s calling it the *rent-to-payment ratio.* By *comparing estimated rents to the estimated PITI payment* itself, you’ll have a much better idea of whether a rental property will _actually_ cash flow month to month.

And today, we’re not _just_ breaking down *how the formula works.* Dave also built an entire spreadsheet that *ranks U.S. real estate markets by their rent-to-payment ratios.* Whether you’re looking for the best cash flow markets to invest in or a quick way to weed out unprofitable properties, this is the kind of math you need to make sharper investing decisions in 2026.

Episode Show Notes:


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0:00 Intro
1:12 The Rules Have Changed
2:58 MY New Rule of Thumb
4:57 How to Calculate It
6:43 Sponsor: Baselane!
7:51 Top Rent-to-Payment Markets
18:51 Real Deal Breakdowns!
25:42 Try the Spreadsheet!

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By: BiggerPockets
Title: This is Better Than the 1% Rule (New Real Estate Rule)
Sourced From: www.youtube.com/watch?v=133yxz3GU_s



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