THE 1% RULE OF THUMB BY BRANDON TURNER OF BIGGER POCKETS

Source: The Book on Investing in Real Estate with No (and Low) Money Down By Brandon Turner

Property Investing takes full commitment before jumping and perhaps, we, as sellers of properties, one of our biggest win is when we encounter a client who’s a rental property investor. Where he purchase properties over and over again, and our end, we get commission over and over again from the same single client. However, most of the property buyers in the Philippines intended to buy for their personal use.

With less than 6 months with DRIVEN and with few clients I talked to… all of them are end users but it starts with the first buy. They buy for themselves. But as I talk to them, I recognize that they intended to lease out these condos in the future. A home buyer turned into Property Investor. And I have the feeling that it is my duty to also educate them on how to look for the best deals by looking into the numbers, location and market. Just knowing the price, market and location, YOU WILL KNOW IF IT’S A GOOD DEAL OR NOT. Read Below.

With Brandon Turner from Bigger Pockets, Ken McElroy from Rich Dad Advisors (Robert Kiyosaki) and Chandler Smith (individual property investor) that I’ve been following for less than a year now, I realized that a good cash-flowing property must meet at least the 1% RULE OF THUMB.

What is this? You just need to know the price of the property and the current rental rate in the market and location. 1% of the property price should be your monthly rental rate. For example, If you’re selling a 4,000,000-worth of 25-sqm Studio Unit in Mandaluyong, you may call it a good investment if it can be rented out for a minimum of 40,000. BUT, that is not realistic enough.

I have a mentor when in comes to property investing and she said IT IS REALLY HARD TO FIND GOOD DEALS IN THE PHILIPPINES UNLIKE HERE IN THE UNITED STATES. The moment she told me that, I remember the 1% RULE OF THUMB. I try to analyze some deals when I entered DRIVEN and found out that NO PROPERTY MEET THIS SIMPLE REQUIREMENT when investing for rentals…

I also joined free live sessions from Carl Dy, A property investor originated as a seller in Ayala Land Premiere where he get the knowledge for property investing. He also said that it is hard to look for a rental property that meets the 1% RULE OF THUMB…

As a seller, HOW CAN I HELP MY FUTURE INVESTOR CLIENTS, IF THERE’S ACTUALLY NO PROPERTIES THAT MEET THIS SIMPLE REQUIREMENT?

UNTIL, I analyze URBAN DECA TOWER EDSA - ARGO UNITS.

You see, this property is now priced at 2,442,000 for 13-sqm studio. Many prospects turn their back on me after they realize that the unit was so small. I go to check the building and the unit for myself and found out that unit owners RENT THEIR UNITS for short term and long term leases. Here are the rates:

AIR BNB - SHORT TERM LEASES

Daily - Minimum 1,300

Weekly - Minimum 7,500

Monthly - Minimum 30,000

LONG TERM LEASES

1 Year - Minimum 25,000

BACK TO THE 1% RULE OF THUMB… The price is 2.4M, using this rule, you must rent out the property with at least 24,000 monthly rent! AND EVERYTHING FITS.

THIS is the ONLY PROPERTY I saw as of today that meets the 1% RULE OF THUMB since I entered DRIVEN. This is the main reason why I continue on marketing this Argo Unit.

HOTEL FINISH | FREE TV | FREE MINI REF | FREE AIRCON | FREE WATER HEATER | FREE BEDS, PILLOWS, BLIND, MIRRORS - COMPLETE PACKAGE

If you’re a buyer or an investor, Message me to know more

(CJ) CARLO JAY J. MANALO 
Marketing Executive, DRIVEN Marketing Group Inc. (Est. 2010) 
Mobile/Viber/Whatsapp: 0938 829 9733 
Email: drivencjmanalo0716@gmail.com  

Under Direct Supervision 
RENE EDUARDO (DJ) DIMALIUAT 
Managing Director, DRIVEN Marketing Group Inc. (Est. 2010) 
Licensed Real Estate Broker 
REB License No.: 4524 

IF YOU HAVE OTHER PROPERTIES that meet the 1% RULE, let’s help each other out!