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Rent-to-Price Ratio (1% Rule)
A quick screen: compare monthly rent to purchase price.
Parcel Platform
Mar 4, 2026
Rent-to-Price Ratio (1% Rule)
Price $300,000 • Rent $2,500/mo
Rent-to-Price Ratio
0.83%
Target Monthly Rent
$3,000/mo
The 1% rule is a quick screen, not an underwriting conclusion. Always validate expenses, financing, and market rents before making an offer.
How this calculator works
Rent-to-price ratio (often called the “1% rule”) is a quick screen: monthly rent divided by purchase price. It’s not a full analysis, but it helps you filter deals fast.
What it includes
- Rent-to-price ratio
- Rent needed for a target ratio (e.g., 1%)
- Quick screening context
How to use it
- Enter the purchase price and your realistic rent estimate.
- Use the ratio to screen deals—then validate with NOI, DSCR, and cash flow.
- Compare ratios across neighborhoods (and adjust expectations by market).
FAQ
Does the 1% rule guarantee a good deal?
No. Taxes, insurance, HOA, maintenance, and financing terms can make or break the deal. Use it as a filter, not a final decision rule.
Should I include rehab in the price?
If you’re buying value-add, consider your all-in basis (price + rehab + closing). The ratio looks different once you include the full cost.
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