Calculate rental property deal metrics with the 1% rule, rent-to-acquisition-cost ratio, cash flow, cap rate, cash-on-cash return, DSCR, and break-even rent. Choose what to solve for, enter the displayed values, and select Calculate.

Find the monthly rent needed at a target of 1% of acquisition cost. Optional settings can change the target and add costs.

Acquisition costs and target

Optional. Blank means $0. Added to purchase price; paid in cash in financing mode.

The 1% rule uses 1. Change this only to test a different monthly target.

1 Percent Rule Formula

The following formula is used to calculate the 1 Percent Rule.

R = P × 0.01

Variables:

  • R is the monthly rent needed to meet the 1% screening target ($)
  • P is total acquisition cost: purchase price plus any rehab and closing costs entered ($)

To calculate monthly rent at the 1% target, multiply total acquisition cost by 0.01. Optional settings let you add rehab and closing costs or change the monthly target. The formula above uses the default 1% target.

What is a 1 Percent Rule?

The 1 Percent Rule is a screening guideline used by real estate investors to compare monthly rent with acquisition cost. At the default target, monthly rent should equal at least 1 percent of that cost. For example, a property with a total acquisition cost of $200,000 has a target rent of $2,000 per month. Meeting this target does not guarantee profitability or positive cash flow. Choose Cash flow and financing to include your financing and operating expense assumptions; blank optional expenses are treated as zero.

How to Calculate 1 Percent Rule?

The following steps outline how to calculate the 1 Percent Rule.

  1. First, determine the purchase price and any rehab and closing costs ($).
  2. Next, multiply total acquisition cost by 0.01 to calculate monthly rent at the 1% target.
  3. Finally, compare that target with the expected monthly rent.
  4. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem:

Use the following variables as an example problem to test your knowledge.

Purchase price = $200,000, with no additional acquisition costs; target monthly rent = $2,000 at 1%.