Temelios

1% Rule Calculator

Instant screening: does this deal pass or fail?

Checks if monthly rent is at least 1% of the purchase price—a common quick filter used to screen out obviously underperforming deals.

The 1% rule eliminates time wasted on deals that won't cash flow. It's a starting screen, not a substitute for full underwriting.

1
Enter purchase price: Total acquisition cost.
2
Enter monthly rent: Realistic market rent from rental comps.
3
See pass/fail and ratio: A ratio below 1% usually means the deal won't generate positive cash flow with financing.

Purchase Price ($)

Monthly Rent ($)

Rent-to-Price Ratio0.90%

1% Rule❌ Fails

•The 1% rule is a screening filter, not a buying criterion. Many highly profitable properties in primary markets trade at 0.5–0.8% — and many that pass 1% still don't cash flow after real expenses.
•Use actual rental comps (closed leases or active listings adjusted for condition) — not Zillow estimates or seller-provided rents.
•In high-cost coastal markets (NYC, LA, SF, Seattle), even 0.5–0.7% may be the realistic ceiling; applying a strict 1% rule eliminates almost every available deal.
•A deal that clears 1% still needs full underwriting. Run the actual vacancy rate, expense ratio, and debt service before making an offer.
•The ratio becomes less meaningful when comparing very different property types (e.g., SFR vs. large multifamily) — use market-specific benchmarks instead.

Related Terms

Want the full picture?

These calculators use your assumptions. Temelios pulls real comps and census data so your vacancy, rent, and expense inputs are grounded in reality.