S
eth Jones, a former mortgage broker in Florida, has a rule for real-estate investing: only rent out homes that generate 1% or more of their value. He sold his 10 properties and invested the money in an exchange-traded fund portfolio.

    Jones started buying investment properties in 2015 and began selling them off in 2020 to diversify his portfolio. He had a goal of owning 100 doors, but instead focused on building a conservative real-estate business that would eventually support him and his family.

    As a mortgage broker, Jones developed the "1% rule," which guides his investment strategy. The rule is simple: if he can rent out a property for more than 1% of its value, it's a good deal. He uses this rule as a guidepost to quickly analyze potential investments.

    After growing his portfolio, Jones opened his own mortgage brokerage in 2018 and was able to target higher-quality properties in top school districts. However, he became concerned about the risks of owning properties in Florida due to hurricane threats and decided to diversify his portfolio by buying a property in South Carolina.

    The COVID-19 pandemic caused a real-estate boom, but Jones anticipated that property values would decline. He sold several properties between 2019 and 2023, including one he purchased for $190,000 that he was able to sell for $500,000. He invested the proceeds in a diversified ETF portfolio.

    Jones has no regrets about selling his properties and believes that fundamentals matter when it comes to real-estate investing. He appreciates the simplicity of not having external worries and late-night phone calls from tenants. While there is still stress involved with trading stocks, Jones feels that life is much easier without the burdens of property ownership.