Quickly screen a rental property. Enter the price and expected rent to see whether it passes the 1% and 2% rules, how much rent it would need, the most you could pay for that rent, and a 50% rule estimate of expenses, NOI and cash flow after the mortgage.
Last updated:
Property
$
$/ mo
$
Added to the price for an all-in rent-to-cost ratio.
%
1 for the 1% rule; some investors use 0.7–0.8 in expensive markets or 2 in cheap ones.
Expenses & financing
% of rent
50 for the 50% rule (everything except the mortgage).
%
%
Enter your values to see the result.
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How to use the 1% Rule Calculator (Rental Property)
Enter the purchase price and total monthly rent for all units.
Add rehab costs if the property needs work, to test the all-in price.
Keep the target at 1% or change it to the ratio you use in your market.
Set the expense ratio (50% for the 50% rule) and, optionally, your mortgage terms.
Press Check deal to see pass/fail, the max price, NOI and estimated cash flow.
The formulas
Rent-to-price ratio = monthly rent ÷ (purchase price + repairs) × 100. It passes the 1% rule at 1% or more.
Max purchase price = monthly rent ÷ target ratio − repairs
Rent needed = (price + repairs) × target ratio
50% rule NOI = monthly rent × (1 − 50%); cash flow = NOI − mortgage payment
Gross rent multiplier = price ÷ yearly rent (the 1% rule equals a GRM of about 8.3)
Example: a $180,000 house renting for $1,650 has a ratio of 0.917%, so it fails the 1% rule by $150 a month. The most you could pay for that rent under the 1% rule is $165,000. With the 50% rule, NOI is $825 a month; a 25% down, 7%, 30-year loan costs about $898 a month, so the estimated cash flow is about −$73.
1% rule quick reference
Price
0.7% rent
1% rent
2% rent
$100,000
$700
$1,000
$2,000
$150,000
$1,050
$1,500
$3,000
$200,000
$1,400
$2,000
$4,000
$300,000
$2,100
$3,000
$6,000
$400,000
$2,800
$4,000
$8,000
$500,000
$3,500
$5,000
$10,000
Use it as a filter, not a verdict
Rules of thumb ignore property taxes, insurance and HOA dues, which can differ several-fold between areas.
Check the rent with real comparable listings, not the seller's estimate.
The 1% rule is a quick screening test for rental properties: the monthly rent should be at least 1% of the purchase price (plus any repairs). A $180,000 house should rent for at least $1,800 a month. Properties that pass are more likely to produce positive cash flow, but it is only a first filter, not a full analysis.
What is the 2% rule?
The 2% rule is a stricter version: monthly rent of at least 2% of the price. It is mostly achievable with inexpensive properties in low-cost areas, which can come with higher vacancy, repair and management costs. Passing it is rare in most US markets today.
What is the 50% rule?
The 50% rule estimates that operating expenses (taxes, insurance, repairs, maintenance, vacancy, management and capital expenses, but not the mortgage) will use about half of the rent over time. Rent minus 50% gives a rough net operating income, and NOI minus the mortgage payment gives an estimated cash flow.
How do I find the maximum price using the 1% rule?
Divide the monthly rent by 1% (multiply by 100) and subtract any repairs. For $1,650 of rent, the most you would pay is $165,000 all in; if the house needs $20,000 of work, the price should be no more than $145,000.
Is the 1% rule still realistic?
In many expensive or fast-appreciating markets, few properties meet 1%, so investors use lower targets such as 0.7% or 0.8%, or rely on cash flow and cap rate analysis instead. The rule also ignores interest rates, taxes and insurance, which vary widely by location.
Should rehab costs be included in the 1% rule?
Yes, most investors apply the rule to the all-in cost (price plus repairs), because that is the money you have to put into the property to get the rent. The calculator adds any rehab you enter to the price.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.