Enter the purchase price of the property and the percentage into the calculator to determine the minimum monthly rent required for the property to be considered a good investment.

1 Percent Rule Formula

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

R = P * 0.01

Variables:

• R is the minimum monthly rent required for the property to be considered a good investment ($) • P is the purchase price of the property ($)

To calculate the minimum monthly rent required for the property to be considered a good investment, multiply the purchase price of the property by 0.01. This will give you the amount of rent that should be charged per month according to the 1 Percent Rule.

What is a 1 Percent Rule?

The 1 Percent Rule is a guideline used by real estate investors to estimate the profitability of a potential rental property. According to this rule, a property should rent for at least 1 percent of the purchase price in order for it to be considered a good investment. For example, a property that costs $200,000 should rent for at least$2,000 per month. This rule helps investors to quickly screen properties and determine if they are likely to generate positive cash flow.

How to Calculate 1 Percent Rule?

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

1. First, determine the purchase price of the property ($). 2. Next, multiply the purchase price by 0.01 to calculate the minimum monthly rent required for the property to be considered a good investment. 3. Finally, calculate the minimum monthly rent required for the property to be considered a good investment. 4. After inserting the variables and calculating the result, check your answer with the calculator above. Example Problem: Use the following variables as an example problem to test your knowledge. purchase price of the property ($) = 200,000