I imagine you'd have to do the math. The 1% (or even 2%) rule only really applies to properties in areas where appreciation is minimal (or negative). A simplifi

I imagine you'd have to do the math. The 1% (or even 2%) rule only really applies to properties in areas where appreciation is minimal (or negative). A simplified view would be: Total profit = (Rental cashflow + appreciation) - (Maintenance + other costs) If you predict appreciation to be high, it may offset low net cashflow or even negative net cashflow. Especially if you use leverage (loans), and have appreciation of 5%+/year. In Austin it's similar (maybe not as extreme): a $300,000 house may rent for $1,500/mo which probably doesn't even cover the mortgage. But 5%/year is $1250/mo. AND there are more than a few tax advantages to barely making money renting (or losing) but selling at a profit later. I am not an accountant or landlord, but I have run the math and it seems to make sense.