Free tool — 1% rule

1% rule calculator.

Rent needed = (price + rehab) × 1%. A fast first-glance screen for rentals — if monthly rent is under 1% of the all-in cost, most deals won't cash flow without help. Use it to reject losers quickly, then underwrite the survivors.

deal inputs

purchase price ($)

rehab / repairs ($) · optional

monthly rent ($)

The 1% rule is a screening shortcut, not a buy signal. It ignores property taxes and insurance, so it breaks in high-tax, high-insurance markets — a property can clear 1% and still lose money each month. Check the real operating expenses and run DSCR — DSCR is the number lenders actually use.

rent needed to hit 1%

$1,500

(price + rehab) × 0.01 / month

your rent vs. price

1.00%

clears the 1% rule

max price at your rent

$150,000

highest all-in price this rent clears

all-in cost

$150,000

purchase price + rehab

1% rule · 101

A screen.
Not a verdict.

The 1% rule filters a list in seconds. It never decides a deal — the real numbers do that.

The math.

Monthly rent ÷ (purchase price + rehab). At or above 1% passes the screen. A $150,000 all-in home needs about $1,500 rent.

all-in costprice + rehab

target rent× 1%

pass zone≥ 1.0%

Where it breaks.

The rule ignores taxes, insurance, and the mortgage. In high-tax or high-insurance markets, a 1% deal can still bleed cash every month.

ignorestaxes + insurance

ignoresthe rate

riskfalse positive

What decides.

Once a listing clears the screen, run DSCR and full operating expenses. DSCR is the ratio lenders actually underwrite.

screen with1% rule

underwrite withDSCR

lender wants≥ 1.20

FAQ

Before you screen.

Straight answers on what the 1% rule can and can't tell you.

— The basics —

What is the 1% rule?

A quick screen: monthly rent should be at least 1% of price plus rehab. A $150,000 all-in property should rent for about $1,500. It rejects weak deals fast — it's not a guarantee of cash flow.

— At 7% rates —

Does the 1% rule still work at 7% rates?

As a screen, yes — but only as a screen. Higher rates plus rising taxes and insurance mean a property can clear 1% and still lose money. Let DSCR decide the deal.

— Which rent —

Gross rent or net rent?

Gross scheduled rent — full market rent before expenses or vacancy. The rule is deliberately crude so you can screen dozens of listings quickly. Net figures come later in a real analysis.

Live · all 50 states

Screen real listings
in one pass.

Verleon AI runs the 1% rule, DSCR, cash-on-cash, and full operating numbers on every active listing across all 50 states — so you only ever look at deals that already pencil out.

Try Verleon AI →Run DSCR next