1% Rule Calculator

Screen a rental in seconds: monthly rent should be at least 1% of the all-in purchase price. Everything runs in your browser.

1% rule check

Purchase price ($)

Upfront repairs ($)

Monthly rent ($)

Results

Rent-to-price ratio

Rent needed for 1%

Rent needed for 2%

Max all-in price at this rent

Verdict

What is the 1% rule?

The 1% rule says a rental’s monthly rent should be at least 1% of what you pay for it (purchase price plus immediate repairs). A $200,000 house should rent for $2,000 a month. It is a fast filter for deciding which listings deserve a full analysis — not proof that a deal cash flows.

Why it is only a screen

It ignores interest rates: at 7% a deal that meets 1% may barely break even after financing.
It ignores property taxes and insurance, which vary several-fold between states.
In high-cost metros almost nothing meets 1%, yet investors still buy for appreciation.

Worked example

Price $250,000 + $10,000 repairs = $260,000 all-in, so 1% = $2,600/month. With market rent of $2,300 the ratio is 0.88% — the property fails unless you can buy closer to $230,000. If it passes, run it through the full rental cash flow calculator.

FAQ

Is the 1% rule realistic in 2026?

In many Midwest and Southern markets yes; in expensive metros rarely. Use it to compare listings within one market.

Should repairs be included?

Yes — use the all-in cost, because that is the capital you actually commit.

What is the 2% rule?

A stricter version (rent ≥ 2% of price) that usually only appears in low-price or higher-risk areas.