1% Rule Calculator
Screen any rental deal in seconds: does monthly rent hit 1% of the purchase price? Get an instant pass/fail verdict, rent-to-price ratio, and gross rent multiplier before deep underwriting.
Inputs
For fixer-uppers, include the rehab budget so the rule is tested against your all-in cost, and use the post-rehab market rent.
Results
- All-in cost (price + rehab): $250,000
- Your rent of $2,100 is 0.84% of all-in cost.
- GRM (purchase price ÷ annual rent) under ~12 generally signals a stronger income market; over ~15 suggests appreciation-driven pricing.
The 1% Rule is a 5-second screen — it ignores taxes, insurance, financing, and expenses. Run the full Rental Property analysis →
When to Use This Calculator
Use this calculator as your first-pass filter when browsing listings or screening a batch of potential rental deals. It answers one question in seconds: is the rent-to-price ratio even in the ballpark? Deals that pass (or come close) earn a full cash-flow analysis; deals that fail badly usually aren't worth further time — at least as pure cash-flow plays.
How It Works
The calculator divides monthly rent by your all-in cost (purchase price plus optional rehab budget). If the ratio is 1% or higher, the deal passes the classic screen. It also shows the rent you'd need to hit 1% and the gross rent multiplier (price ÷ annual rent), a related metric appraisers and investors use to compare income properties. It intentionally ignores financing, taxes, and expenses — that's what makes it fast, and also what makes it only a screen.
Key Terms
How to Use This 1% Rule Calculator (Mini Guide)
The 1% Rule is a 5-second deal filter, not an underwriting model. Use it to decide which deals deserve a full analysis — and which aren't worth your time.
What this calculator checks
It compares monthly rent against 1% of your all-in cost (purchase price plus any rehab budget).
You get a pass/fail verdict, the exact rent-to-price ratio, the rent needed to hit 1%, and the gross rent multiplier (GRM).
How to use it well
Screening a list of properties? Run each through in seconds and only deep-dive the ones that pass or come close.
For fixer-uppers, include the rehab budget and use the post-rehab market rent — testing pre-rehab rent against post-rehab cost skews results.
Treat 0.8–1.0% as a 'worth a closer look' zone in most markets.
What the rule ignores
Taxes and insurance — a 1% deal in a high-tax county can cash flow worse than a 0.9% deal in a low-tax one.
Financing — interest rates change the math completely; the rule was popularized when rates were far lower.
Expenses and vacancy — condition, age, and tenant quality matter enormously.
Appreciation — strong-appreciation markets rarely pass, yet can still build wealth.
Next steps after screening
If a deal passes (or comes close), run it through the full Rental Property calculator with real tax, insurance, and expense numbers.
Compare the GRM against other properties in the same market to spot relative bargains.
Never make an offer on the 1% Rule alone — it's a filter, not a verdict.