Multifamily Property Classes

The 1% and 2% Rules in Commercial Real Estate

The 1% and 2% Rules in Commercial Real Estate

If you're a commercial real estate investor deciding whether a property is a good fit for your portfolio, you might have heard of the 1% or the 2% rule. The 1% rule states that a property's monthly rent must be at least 1% of its purchase price in order for the owner to break even. The 2% rule states that a property's monthly rent needs to be at least 2% of its purchase price in order for the owner to make a sustainable profit. 

Multifamily Property Classes in Commercial Real Estate

Multifamily Property Classes in Commercial Real Estate

Much like office properties are classified by quality as either "A", "B", or "C" properties, multifamily properties such as apartments can also be classified this way. However, unlike office buildings, multifamily properties are often classified from "A" through "D."