The short answer
Last updated: July 2026
The 1% rule is a quick screen: a rental’s monthly rent should be at least 1% of its purchase price. On a $200,000 property that’s $2,000 a month. Meeting it suggests the rent is high enough relative to price to be worth analyzing. It ignores expenses and financing, so it’s a filter, not a verdict.
After the estimate:
Self-management software1% rule calculator
Does the rent clear the 1% rule?
A quick screen investors use: monthly rent at or above 1% of the purchase price. It's a first-pass filter, not a rule — a deal can miss it and still work.
Purchase price
$
Monthly rent
$
The 1% rule is a back-of-envelope screen, not a law or a guarantee. It ignores expenses, financing, and your market — plenty of sound rentals fall short of it, especially in higher-priced areas.
Input-driven result
Your inputs
Formula
Result below
Rent as a % of price
0.87%
$2,600 monthly rent ÷ $300,000 price. The 1% rule looks for 1.00% or more.
Rent the 1% rule targets
$3,000
1% of $300,000 — the monthly rent that would exactly meet the screen.
Below the 1% screen — worth a closer look
At 0.87%, the rent is under 1% of price. That's common in pricier markets — it's a flag to dig into the real numbers, not a rejection.
Monthly rent versus 1% screen
Monthly rent
$2,600
1% target rent
$3,000
Difference from target
$400
Estimate based on your inputs. Not a promise of results.
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How it works
How this tool works.
The 1% rule is shorthand investors use to triage listings fast: if the monthly rent is at least 1% of the purchase price, the deal is worth a closer look. It’s a screen, not a law — a way to skip the obvious non-starters, not to pick winners.
Enter the price and the monthly rent, and this calculator shows the rent as a percentage of price, the rent the 1% target would imply, and whether the deal clears the screen. It’s arithmetic on your inputs — a first-pass filter that plenty of sound rentals miss, especially in pricier markets.
1
Enter the purchase price and the monthly rent.
2
The tool divides the rent by the price (×100) to show the rent as a percentage of price — the 1% rule looks for 1.00% or more.
3
It also shows 1% of the price: the monthly rent that would exactly meet the screen, so you can see how far off a listing is.
4
You get a clear “clears the screen” or “worth a closer look” read — framed as a first-pass filter, never a pass/fail verdict on the investment.
Make the result useful
One-percent-rule screening
Purchase price is the value used to set the monthly-rent screen.
Monthly rent is expected recurring rent, not a one-time incentive.
The 1% threshold is a chosen screening convention, not a universal requirement.
Expenses, financing, condition, and local demand must be reviewed after the quick screen.
The assumptions that move this result
Purchase price
Acquisition amount used for the screen.
Monthly rent
Expected recurring rent.
Threshold
1% monthly-rent convention.
Context
Expenses and financing outside the rule.
Calculation lens
one-percent target rent = purchase price × 1%
Use the output as a documented scenario result, not a guarantee.
Read the number in context
Worked scenario
Scenario: $250,000 price implies a $2,500 monthly 1% target.
Edge case
Edge case: a property below 1% can still work with strong expenses or financing.
Does not calculate NOI, cash flow, or investment suitability.
Before you act
• Use as a first filter only.
• Build an expense budget next.
• Check rent evidence and condition.
Worked formula
one-percent target rent = purchase price × 1%
Questions landlords ask
Questions about this tool and its limits.
What is the 1% rule?
A quick screen: a rental’s monthly rent should be at least 1% of its purchase price. On a $200,000 property that’s $2,000/month. Meeting it suggests the rent is high enough relative to price to be worth analyzing — nothing more.
Is the 1% rule actually reliable?
It’s a rough filter, not a law of investing. It ignores expenses, financing, taxes, and your local market entirely. In many higher-priced areas almost nothing hits 1%, and plenty of properties that miss it still cash-flow well. Use it to shortlist, then run the real numbers.
What if a property misses the 1% rule?
Missing it is a flag to dig deeper, not a rejection. It’s common in appreciating or expensive markets, where investors accept lower rent-to-price ratios for other reasons. Follow up with cash flow, cap rate, and your own assumptions before deciding anything.
How is this different from cash flow or cap rate?
The 1% rule is the fastest and crudest of the three — it only compares rent to price. Cash flow and cap rate factor in expenses and financing, so they tell you whether a deal actually works. Use the 1% rule to filter, the others to analyze.
Keep exploring
More tools for analyze a deal.
Rental property ROI calculator
Estimate cap rate, cash flow, and cash-on-cash from your numbers.
Open tool →
Cap rate calculator
Estimate cap rate and NOI from price, income, and expenses.
Open tool →
Gross rent multiplier (GRM) calculator
Estimate the GRM — price relative to a year of gross rent.
Open tool →
Editorial ownership
Written and maintained by the Aptoria editorial team
Editorial method reviewed July 28, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
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