What is the 7% rule in real estate?

Excuse me, but could you elaborate on the concept of the 7% rule in the realm of real estate? I've heard it mentioned in discussions, but I'm not entirely clear on its specific meaning and application. Could you provide a concise yet comprehensive explanation, perhaps outlining how it's used to assess potential investment opportunities and the underlying rationale behind it? I'm particularly interested in understanding how it factors into the financial analysis and decision-making process for those considering entering the real estate market.