1% Rule Calculator
Quick rental screening: monthly rent should be ≥ 1% of purchase price.
Result
1% rule
✗ Fails
Need $2,500/mo, have $2,200/mo (0.88%).
- Price$250,000
- Required rent (1%)$2,500/mo
- Actual rent$2,200/mo
- Rent / Price ratio0.88%
- VerdictFails
Step-by-step
- Required rent = price × 1% = 250,000 × 0.01 = $2,500/mo.
- Actual rent ($2,200) < required ($2,500) → fails.
How to use this calculator
- Enter purchase price and expected monthly rent.
- Read pass/fail.
About this calculator
The 1% rule is a heuristic: monthly rent should be ≥ 1% of purchase price. A $250k house should rent for ≥$2,500/mo. Most modern hot markets fail this — typical Sun Belt or Midwest rentals around 0.7-0.9%. Failing the 1% rule doesn't mean a bad deal, just that cash flow will be slim or rely on appreciation.
Frequently asked
It's a rule of thumb that approximates cash-flow positivity at typical interest rates. Doesn't account for taxes, maintenance, or expenses; lower-quality heuristic than NOI / DSCR.
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