1% Rule Calculator
Check monthly rent against a percentage of the purchase price, and see the rent or price needed to hit your target.
Quick answer
The 1% rule is a screening guideline that monthly rent should be at least 1% of the total purchase cost: ratio = monthly rent / total cost x 100. Required rent = total cost x target %.
1% Rule Calculator
1% is the classic rule. Change it to test another threshold.
Rent-to-Price Ratio
—
Meets Target?
—
Rent Needed for Target
—
Rent Surplus / Shortfall
—
Max All-in Cost at This Rent
—
Max Purchase Price
—
Rent Needed at Different Targets
| Target % | Rent needed / month (₹) | Max all-in cost (₹) | Max purchase price (₹) |
|---|
Assumptions & method
- Total cost = purchase price + rehab budget. Ratio = monthly rent ÷ total cost.
- Rent needed = total cost × target %. Max all-in cost = monthly rent ÷ target %. Max purchase price = max all-in cost − rehab.
- The 1% rule is a rough screening guideline, not a measure of profit or a recommendation to buy.
- Closing costs, taxes, insurance, maintenance, vacancy, management and financing are not included.
- The table shows the same maths at nearby targets so you can see how sensitive the answer is.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How the 1% rule works
The 1% rule is a quick screen that investors use to sort through listings. You divide expected monthly rent by the total cost of the property, including any rehab you need to do before it can be let. If the answer is 1% or higher, the property passes the screen. A property costing 4,500,000 with 300,000 of rehab and 45,000 monthly rent comes out at 0.94%, just short. The calculator also reverses the test, showing the rent you would need or the highest price you could pay for a given rent. Because the rule skips costs, a pass is only a reason to look closer.