1% Rule Calculator – Rental Cash-Flow Screen (1% & 2% Rule)

A fast 1% rule calculator that screens rental deals in seconds. Enter the monthly rent, purchase price, and any rehab cost to get your rent-to-price ratio and a clear pass or fail on both the 1% rule and the stricter 2% rule. It also shows the rent you'd need to hit each threshold and the most you could pay and still satisfy the 1% rule. Runs entirely in your browser; nothing is uploaded.

🔒 Pure browser calculation — nothing is uploaded.

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Added to the price for your all-in basis.

Your rental screen

Total all-in price—
Rent-to-price ratio—
1% rule—
2% rule—
Rent needed for 1%—
Rent needed for 2%—
Max price for the 1% rule—

The 1% rule is a screen on gross rent — it ignores expenses, vacancy, and financing. Prove out a passing deal with the cap rate calculator before you commit.

How the 1% and 2% rules work

The 1% rule is the fastest gut-check in rental investing. It compares a property's monthly rent to everything you'd put into it — purchase price plus rehab — and asks whether the rent is at least 1% of that total: rent-to-price ratio = monthly rent ÷ total price × 100. A $180,000 all-in property renting for $1,800 lands at exactly 1.0% and just clears the bar. The point is speed: you can run it in your head while scrolling listings to decide which deals deserve real analysis and which to skip.

The 2% rule is the same math with a higher hurdle — rent of at least 2% of the total price. It signals strong gross cash flow, but genuine 2% deals are now concentrated in low-cost markets that often carry higher vacancy, turnover, and management load. Treat 1% as a reasonable screening line and 2% as an aggressive target rather than a baseline you should expect to find everywhere. In expensive, high-appreciation metros, even good deals may sit below 1%, and that's where the rule stops being the right yardstick.

Remember what the rule leaves out: every operating cost. Rent-to-price says nothing about property tax, insurance, HOA, maintenance, vacancy, or your mortgage, so two properties at the same ratio can have wildly different bottom lines. That's why it's a filter, not a verdict. It's closely related to the gross rent multiplier (price ÷ annual rent) and is the gross-yield prelude to cap rate, which divides net operating income by price to show what the property earns after expenses.

Once a property passes this screen, dig deeper: sanity-check pricing with the price-to-rent ratio calculator, fold in expenses and vacancy with the cap rate calculator, and browse every tool in the real estate investment calculators hub.

Frequently Asked Questions

The 1% rule says a rental's monthly rent should be at least 1% of the total amount you put into the property (purchase price plus rehab). The formula is rent-to-price ratio = monthly rent ÷ total price × 100, and the deal passes when that ratio is 1% or higher. A $200,000 all-in property would need to rent for at least $2,000 a month. It's a back-of-the-envelope screen that tells you in seconds whether a listing is worth a closer look — not a measure of profit.

Divide the expected monthly rent by the total amount you'll have in the property — purchase price plus any rehab — then multiply by 100 to get a percentage. If the result is 1.0% or more, the deal clears the 1% rule. Example: $1,800 rent on a $180,000 all-in cost is 1,800 ÷ 180,000 × 100 = 1.0%, exactly at the line. This calculator does the division live as you type and flags the pass or fail for you.

The 2% rule is the stricter cousin of the 1% rule: rent should be at least 2% of the total price, so a $100,000 property would need to rent for $2,000 a month. Properties that clear 2% do exist, but they're concentrated in low-cost markets and often come with higher vacancy, turnover, and management headaches. In most metros today a true 2% deal is rare. Treat 2% as an aggressive cash-flow target, not a baseline expectation.

Include rehab — that's why this calculator has a rehab field. The rule works best on your all-in basis (purchase price plus renovation), because rent has to service the full amount you've sunk into the deal, not just the sticker price. Closing costs and other acquisition fees are smaller and often left out for a quick screen, but folding them into the rehab field makes the test more honest. Either way, be consistent across the deals you compare.

Because rent-to-price says nothing about expenses. Two properties can both hit 1% while one drowns in property tax, insurance, HOA dues, and maintenance and the other barely has any. The rule ignores vacancy, financing, repairs, and management entirely. Use it to quickly reject obvious losers and shortlist candidates, then prove out the survivors with real numbers — net operating income, cap rate, and cash flow after the mortgage.

They're cousins that measure different things. The 1% rule looks only at gross rent against price; cap rate divides net operating income (rent after vacancy and operating expenses) by price. A property that passes the 1% rule has roughly a 6–8% gross yield, but its cap rate is always lower once expenses come out. The 1% rule is the 30-second filter; cap rate is the follow-up that accounts for what it actually costs to run the place.

They're two views of the same relationship. The gross rent multiplier (GRM) is price ÷ annual rent; the 1% rule is monthly rent ÷ price. A property at exactly 1% monthly rent has a GRM of about 8.3 (1 ÷ 0.12). Lower GRM and higher rent-to-price both point to the same thing — more rent per dollar of price. Investors who think in annual terms reach for GRM; those screening listings on the fly tend to use the 1% rule.

That's common in expensive, high-appreciation metros, where prices have outrun rents. It doesn't mean those deals are bad — it means the 1% rule is the wrong yardstick there. Investors in those markets lean on appreciation, lower vacancy, and stronger tenant pools, and they screen with cap rate and cash-on-cash return instead. Adjust your threshold to local reality: a 0.7–0.8% deal in a prime city can outperform a 1.5% deal in a rough one.

Rearrange the formula: max price = monthly rent ÷ 0.01, which is just rent × 100. If a unit rents for $1,500, the most you can pay all-in and still clear the 1% rule is $150,000. This calculator shows that ceiling automatically, so you can work backward from a known rent to the price you'd need to negotiate to.

No. This calculator is pure client-side JavaScript — your rent, price, and rehab figures are never uploaded, logged, or stored. It keeps working offline once the page has loaded.