Free tools
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.
Your numbers
Enter price and monthly rent. We'll tell you if the rule fires.
Rent-to-price ratio
0.88%Tight
- 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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Send my numbers to the teamFAQ
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.
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