Type a price and a rent. You get the ratio, the rent that would pass the screen, and the price at which the current rent would pass. Then read what the rule cannot see.
The 1% rule is the oldest screen in rental investing: a property is worth a closer look if the monthly rent is at least 1% of the purchase price. A $200,000 property should rent for $2,000. That is the whole rule.
It works as a filter because rent-to-price is the raw material of every other return metric. At 1%, gross yield is 12%, which historically left room for expenses and a mortgage with cash flow to spare.
Prices rose far faster than rents through the early 2020s, and mortgage rates roughly doubled. In most metros the typical listing now sits between 0.5% and 0.8%, which is a 6% to 9.6% gross yield. That does not make the rule useless; it makes it a ranking tool. A 0.85% deal deserves attention before a 0.6% one, and anything actually at 1%, a 12% gross yield, deserves same-day attention along with skepticism about why. The rental yield calculator reads the same bands in yield terms, so the two agree on any given property.
Treat a pass as permission to spend twenty minutes on the full arithmetic, never as a reason to offer.
The free DealGauge calculator grades any rental A to F across cash flow, cash-on-cash, financeability and cap rate, then solves the most you could pay and still hit your targets. No account, no email, no property limit.
Grade a deal freeAs a pass-or-fail test, mostly. As a ranking screen it still works: rent-to-price remains the raw ingredient of every return metric, and higher is still better.
A relic of post-2008 pricing and very cheap markets. Properties at 2% today are usually in areas with high vacancy or heavy repair burdens. Verify twice.
Many workable deals live between 0.8% and 1%, which is a 9.6% to 12% gross yield. Most 2026 listings sit below that, between 0.5% and 0.8%, and at those ratios positive cash flow at common rates usually requires a lower price or an unusually large down payment.
This is one metric. The free calculator grades the whole deal A to F after every real expense and shows your walk away price. No account, nothing stored.
New to rentals? The free beginner guide, checklist and market report are on the homepage.
Related: The 1% rule, explained in full · The 50% rule · Rental yield calculator
General information and educational content only, not investment, tax, or legal advice. Benchmarks are common rules of thumb, not guarantees or projected results. Results are estimates from the numbers you enter. Verify every figure and consult a qualified professional before purchasing any property.