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50% Rule
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Last discussed Aug 2, 2026
A real estate investing rule of thumb that states approximately 50% of gross rental income on larger multifamily properties will go toward operating expenses, helping investors quickly estimate net operating income.
Recently discussed in
"Don't Buy A Home!" Ben Mallah's Final Warning For The 2026 Real Estate Market
Ben Mallah · Aug 2, 2026
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Ben Mallah
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Used for: Quickly estimating operating expenses and net operating income for 100+ unit multifamily properties without detailed underwriting.
Praised: Consistently accurate for large multifamily; simple mental math; accounts for...
vs: Does not apply to single family homes (expenses closer to 15%) or sub-100 uni...
"The no-fail, sure way of being safe — if you're dealing with 100 plus unit buildings — you figure out what your gross rents are. Let's say the place is making a million dollars a year gross rents. You cut it in half. Half your money is going to al..."
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