1% Rule Calculator (Rental Property Screening)
About the 1% Rule
The 1% rule is a quick screening tool for rental property investors. A property passes if the monthly rent is at least 1% of the purchase price.
Formula: Rent-to-Price Ratio = (Monthly Rent / Purchase Price) × 100
A property passes the 1% rule when this ratio ≥ 1.0%
Important: The 1% rule is a screening tool, not a complete analysis. Properties that pass should undergo full financial analysis including operating expenses, vacancy rates, and maintenance costs.
Note: The 1% rule is harder to achieve in expensive markets and may be too strict in high-appreciation areas.
About This Calculator
This 1% rule calculator (rental property screening) helps you move from raw inputs to a decision-ready output in seconds.
Inside real estate investment, this tool gives you a practical way to model scenarios, compare outcomes, and make better next-step decisions without spreadsheet overhead.
If your workflow expands, pair this calculator with Cap Rate Calculator and Cash-on-Cash Return Calculator to cross-check assumptions and build a stronger analysis chain.
Formula
Use the calculator inputs to apply the underlying method and return a consistent result instantly.
Example Calculation
The worked example below demonstrates how the input fields translate into the final output. Use it as a quick validation pass before entering your own numbers.
- input value: 10
- comparison value: 4
Explanation of Results
Result Interpretation
The 1% rule calculator (rental property screening) returned computed result based on input value 10 and comparison value 4. Use this result as a baseline, then adjust one input at a time to understand how sensitive your outcome is before making decisions.
FAQ
How should I validate the 1% rule calculator (rental property screening) result?
Run a second scenario with rounded numbers, then compare the direction and magnitude of the change before using the value operationally.
What formula is this based on?
This page uses the following formula logic: Use the calculator inputs to apply the underlying method and return a consistent result instantly.
Can I bookmark this real estate investment tool?
Yes. Use the canonical URL /finance-economics/real-estate-investment/1-rule-calculator-rental-property-screening to return to this calculator in the Finance & Economics library.
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See Also
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