What is the 7 Rule in Real Estate?
The 7 rule in real estate is a simple yet powerful guideline for investors. It suggests that a property should generate at least 7% of its purchase price in annual rental income. This rule helps investors quickly assess the profitability of potential investments. Understanding this rule can be a gamechanger for both new and seasoned investors. It offers a straightforward way to evaluate properties without diving into complex financial analysis. By applying the 7 rule, investors can focus on properties with strong cash flow potential. This approach is particularly useful in stable or growing markets. Whether you’re a potential homebuyer or a financial advisor, the 7 rule can enhance your investment strategy.
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