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1️⃣ 1% Rule Calculator

Check whether a rental property passes the 1% rule: monthly rent should be at least 1% of purchase price. See rent gap, implied max price, and pro forma analysis.

📍 Property Address (optional)
InputsYour Numbers
Property Details
Purchase Price?
$
Current Monthly Rent?
$
Pro Forma Monthly Rent?
$
ARV / Stabilized Value?
$
As-Is AnalysisCurrent
Enter values to see results
Rent-to-Price Ratio
--
target 1.0%+
Rent Needed for 1%
--
monthly target
Rent Gap
--
above/below 1%
Annual Gross Yield
--
rent x 12 / price
1% Rule Analysis
Purchase Price--
1% of Purchase Price--
Current Monthly Rent--
Rent/Price Ratio--
Implied Price at Various Ratios
Max Price at 1% Rule--
Max Price at 0.8% Rule--
Max Price at 0.6% Rule--
Gross Yield at Current Price--
Pro FormaAfter Plan
Enter pro forma values
Pro Forma Ratio
--
vs as-is
ARV Ratio
--
rent / ARV
Rent Increase Needed
--
to hit 1% on price
Price Reduction Needed
--
to hit 1% at cur rent
Path to 1% Rule
As-Is Ratio--
Pro Forma Ratio (higher rent)--
Pro Forma on ARV--
1% Rule at Pro Forma Rent?--

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1
Enter Price and Rent
The 1% rule is a quick screen: monthly rent / purchase price should be 1% or more. Enter both to see your ratio instantly.
2
Understand the Ratio
1% ratio = 12% gross yield. This sounds high because it is -- the 1% rule is a conservative screen used mainly in Midwest and Southeast value markets.
3
Know the Market Context
In high-cost markets (California, NYC, coastal cities), the 1% rule is virtually impossible to meet. In those markets, investors accept lower ratios (0.5-0.7%) and rely on appreciation.
4
Use It as a Screen
The 1% rule is a first-pass filter, not a final analysis. Passing the 1% rule doesn't guarantee cash flow; failing it doesn't mean the deal is bad.
5
Check the Pro Forma
Enter the rent you expect after improvements. Some value-add deals fail the 1% rule as-is but pass after a rent increase. The calculator shows whether that's achievable.
6
The Implied Price Table
More useful than checking: the table shows the maximum price you should pay at 1%, 0.8%, and 0.6% ratios for your current rent. Use this to set your offer.

The 1% Rule states that monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for at least $2,000/month. It's a quick mental filter for screening deals.


The 1% rule works as a proxy for cash flow potential. Properties that pass the 1% rule generally cash flow positively at typical leverage ratios; properties significantly below often don't. But it's a rough guideline, not a substitute for full analysis.


In many markets today (2025), the 1% rule is difficult to meet. A 0.7-0.8% ratio can still work with low expenses, appreciation potential, or moderate leverage. Always run the full numbers -- cap rate, cash-on-cash, and DSCR -- before making a decision.

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