That is awesomely bad advice. Google 1%/50% rule, or transaction costs for buying/selling real estate, or typical maintenance costs for a house... covering your mortgage is not making money.
Not trying to pick a fight with a "handlebar" or hi-jack a thread :) , but Walt, the rules you are quoting are typically invoked when evaluating a property for it's investment potential. That's not what's going on here. This thread and my example are exploring ways to save/make money in a situation where a person a) needs a place to live and b) is comfortable having multiple roommates leasing from them.
In my brother's situation (while he was also a med student like the OP), he was able to buy a home that met his immediate needs, as well as providing enough space in the case that he started a family. All this, while consistently making enough to cover his mortgage payments, even with only 2 tenants. For the record, more than half of the time, he had 3 tenants and the utilities were always split equally among all residents. And when my brother lived in Europe for 1 year, there were 4 tenants in the place. During this time, the place was at it's income-producing maximum and met not only the 1% rule, but the 2% rule and obliterated the 50% rule!! And don't forget that it provided him free lodging for all the years except when he was in Europe. Seems pretty Mustachian to me...
I'll plead guilty to leaving all those details out of the original post. But that's because the goal was not to educate the OP on the 1% or 50% rules of evaluating real estate, since that wasn't the question at hand.
The advice was targeted for someone in a very specific situation, not someone evaluating rental real estate in general. And I still contend the 1% rule should not need to be met here (where the owner will be a resident) because, as you can see from the example I provided, there is value to the owner in the form of having others cover their lodging cost. After all, the alternatives were: a) paying rent and b) paying rent and trying to line up roommates to pay you enough to cover your rent.
Using your logic, anyone who owns the home they reside in, but doesn't collect enough monthly rent to cover 1% of the cost is on the bad end of a real estate deal.
If you buy a quad-plex and it doesn't quite meet the 1% rule because you only rent out 3 of the units and live in one, is that a bad deal? Probably not!! Does it require further investigation? Sure. But to say it's and "awesomely bad" deal before running all the numbers is a little silly.