How can the 1% rule help you find a rental property with the best returns?
Can you use this to find suitable rentals from foreclosed properties in the Philippines?
Yes, of course! I’ll explain how with real-life examples.
Note: The video recording did not include the part where I gave a more detailed explanation re: the term/formula for Gross Rental Yield. So what is gross rental yield?
Gross rental yield – Quick definition
Monthly Gross Rental Yield compares the monthly rent to the selling price, as a percentage and is simply the monthly rent divided by the selling price.
Monthly Gross Rental Yield can also be referred to as the monthly gross return on investment of a rental property.
Links mentioned in the video
- Gross Rental Yield Calculator: https://www.foreclosurephilippines.com/rental-yield-calculator/
- My foreclosed property that exceeds the 1% rule: https://youtu.be/ZL1zCtCShWY
0:00 Intro to 1% rule for rentals
0:09 Summary/definition of 1% rule for rentals
0:20 Why the 1% rule is useful when looking for rental properties
0:32 You should still get rental rates for tenanted properties
1:08 How to get rental rates
1:35 Step-by-step for foreclosed properties
2:00 How to establish accurate rental rates via market research
2:15 Gross Rental Yield definition w/ formula
2:34 Establish the average in your target location
2:49 Sample computation w/average for target location
3:40 Workshop – sample property #1 (Above average)
4:12 Workshop – sample property #2 (Below average – overpriced)
4:35 Workshop – sample property #3 (Above average)
4:52 My observation/insights for target location within Las Pinas
5:45 My Gross Rental Yield Calculator
5:58 Sample calculation #1 (w/ explanation)
7:24 Example foreclosed property that exceeds 1% rule
About the video
This was recorded during the Wealth Summit at the PICC in 2017. While this just an excerpt of my talk about investing in foreclosed properties, it still has a lot of info when it comes to choosing rental properties with the best returns using the 1% rule.