Estimate for planning. Not financial or investment advice.
We compute rent as a percent of price, the 1% and 2% target rents, and the gross rent multiplier, then give a quick verdict.
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The 1% rule says a rental’s monthly rent should be at least 1% of its purchase price — a quick filter before you run full numbers. A $250,000 property should rent for ~$2,500. The stricter 2% rule (rare in today’s market) signals a cash-flow gem.
The 1% rule is a starting filter, not a buy signal — high-appreciation markets routinely fail it yet still make great long-term investments. Use it to triage listings, then confirm with the full rental property calculator. The gross rent multiplier (price ÷ annual rent) is another quick comparison; lower is cheaper relative to rent.
Monthly rent should be at least 1% of the purchase price.
Harder in pricey/appreciating markets; treat it as a screen.
Price divided by annual rent; lower is cheaper relative to rent.
No — it's a quick estimate.