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.