1 Percent Rule Calculator

About this calculator

The 1% rule is a quick screening test rental-property investors use before running a full analysis: it says monthly rent should equal at least 1% of the property's purchase price. A $200,000 rental clearing that bar would need to rent for at least $2,000 a month; anything below that is treated as a warning sign that the deal is priced too high relative to its rental income.

Real estate investors use it as a first-pass filter when scanning many listings, since it takes seconds to check and quickly eliminates deals unlikely to cash-flow before spending time on a full pro forma with taxes, insurance, vacancy and maintenance costs. It's deliberately crude — it says nothing about appreciation, financing terms or a specific market's rent growth — so most experienced investors treat failing the 1% rule as "look closer" rather than an automatic disqualifier, especially in expensive coastal markets where almost nothing passes it.

This calculator takes a property's purchase price and monthly rent and tells you whether it clears the 1% threshold.