It is a rule of thumb that is popular with many people here.
It will rule out any investment property located in any high-value major global city (New York, London, Hong Kong, Vancouver, Tokyo, Sydney, Singapore etc).
That doesn't make investing in those cities a lousy proposition, far from it if you are prepared to tolerate negative cash flow in return for higher long term capital growth.
But if cash flow is your game, and if you operate in relatively low-value markets (under $200k), then even I will admit this is a rule worth following.