What is the rule of 30 and who came up with it?
I can't find the answer to this question and was wondering if anyone knew what is was.
Rule of 30 is a one-dimensional binary cellular automaton rule introduced by Stephen Wolfram in 1983.
I am not aware of any "rule of 30" that pertains to economics. However a "statistical" rule of 30 says, effectively, that one shouldnt make statistical inferences on samples of less than thirty.
The "Rule of 30" is a guideline often used in real estate investment analysis to quickly estimate the maximum price an investor should pay for a rental property while achieving a reasonable return on investment (ROI).
According to the rule, the monthly rent for a property should be approximately 1% of the purchase price or more. For example, if a property costs $300,000 to purchase, the monthly rent should be around $3,000 or more.
It is important to note that the Rule of 30 is just a simplified guideline and does not take into account all the factors of real estate investment analysis, such as expenses, financing costs, and market conditions. It can provide a rough estimate, but a more comprehensive analysis is always recommended.
As for its origin, there isn't a single known source or specific individual attributed to creating the Rule of 30. It is believed to have emerged as a practical rule of thumb within the real estate investing community over time. Investors have found it useful as a quick way to evaluate potential properties and narrow down their options.