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1% Rule Calculator

The classic 30-second rental screen. Enter price and monthly rent — we'll tell you instantly whether the deal clears the 1% threshold.

Rent-to-Price Ratio

0.88%

→ Tight

Property purchase price
USD
Monthly rent
USD / month

Use achievable market rent, not pro-forma.

1% rule
Fails
Rent needed to pass
$2,500 / mo
Property price
$250,000
Monthly rent
$2,200
How this is calculated

Ratio (%) = (Monthly rent ÷ Property price) × 100

A deal "passes" when ratio ≥ 1%. The rule is a cash-flow screen, useful in flat markets, often impossible in appreciation markets.

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We track which U.S. submarkets still produce 1%+ rent-to-price. Free 30-minute consult and a current shortlist for your buy-box.

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FAQ

Common questions

Does the 1% rule still work?

It's a screen, not a verdict. In most major U.S. metros, almost no deal passes the 1% rule today, appreciation has outrun rents. It still works in tertiary Midwest and Southern markets, where investors specifically target it for cash flow.

What about the 2% rule?

The 2% rule is the same idea cranked up, monthly rent should equal 2% of price. It's effectively extinct outside heavily distressed properties, mobile homes, or sub-$50K Rust Belt deals. If a listing claims to hit 2%, double-check the rent and the rehab budget.

Should I avoid deals that fail the 1% rule?

No, many great deals fail it, especially in appreciation markets like coastal California or central London. Use it to flag a property that needs every other metric (cap rate, DSCR, cash-on-cash) to pencil with no margin for error.

How does the 1% rule relate to cap rate?

Roughly: a property that hits 1% rent-to-price often produces a cap rate around 6%–8% after expenses. The 1% rule is a 30-second proxy for that math, fast enough to use while scrolling MLS, but no substitute for real underwriting.
Need help interpreting your numbers?

Ready to find 1%-rule cash-flow markets with our team?

We track which submarkets still produce 1%+ rent-to-price ratios and which don't. Send us your buy-box and we'll point you to the live deals.