4 3 2 1 Rule: A Simple Way to Evaluate Any Property

If you’ve ever felt overwhelmed by numbers while house hunting, the 4‑3‑2‑1 rule can cut the noise. It boils down a whole lot of data into four quick checks. You can use it whether you’re buying, selling, or just curious about a home’s value.

What the 4‑3‑2‑1 Rule Means

Here’s the breakdown. 4 stands for the four most important location factors: proximity to work, schools, shopping, and transport. 3 is the three key price signals: recent sale price, listed price, and price per square foot. 2 covers the two condition items you should verify – structural soundness and recent upgrades. Finally, 1 is the single number that matters most to you – your budget or your expected return.

Why those numbers? Location drives demand, price tells you if the market is hot, condition shows hidden costs, and your personal number keeps you from over‑paying. By ticking each box, you get a clear picture without digging through endless reports.

How to Use It When You Look at a Property

Step 1 – Map the 4. Grab a quick map or use a phone app to see how far the house is from the four spots that matter to you. If the commute is over 30 minutes, you might already have a deal‑breaker.

Step 2 – Check the 3. Look up the last three sales in the neighborhood. Compare their prices to the current listing. If the home is listed 15% higher than recent sales, ask the seller why.

Step 3 – Inspect the 2. Walk through or hire a inspector to verify the roof, foundation, and any recent renovations. A new kitchen can add value, but a leaky roof will drain your budget.

Step 4 – Align the 1. Take the numbers you gathered and see if they fit your budget or your investment goal. If you plan to rent out the place, calculate expected rent versus mortgage, taxes, and maintenance. If the rent covers at least 30% of the monthly cost, the deal passes the rule.

Real‑world example: A two‑bedroom flat in Mumbai is 1,200 sq ft, listed at ₹1.2 crore. The four location factors are good – it’s near a metro station, a school, a market, and a hospital. Recent sales show a price per sq ft of ₹9,800, which means the flat’s fair price should be around ₹1.176 crore (the 3 check). The roof was replaced last year and the kitchen was upgraded (the 2 check). Your budget is ₹1.2 crore, and you plan to rent it for ₹45,000 a month. After expenses, the rent covers 35% of the monthly cost, so the 1 check passes. The 4‑3‑2‑1 rule says this is a solid buy.

Using the rule saves time. Instead of scrolling through dozen listings, you focus on four quick questions. It also helps you talk confidently with agents – you’ll know exactly what to ask and why.

Remember, the rule isn’t a law. It’s a shortcut. If a property scores well, dig deeper before signing anything. If it fails any step, move on – there are plenty of homes that fit the rule perfectly.

Give the 4‑3‑2‑1 rule a try on your next house hunt. You’ll be surprised how fast you can spot a good deal and avoid a costly mistake.