The 1% rule is a quick screen: monthly rent should be at least 1% of the purchase price. Enter both to check a deal in seconds.
The 1% rule is a rough first filter, not a buy signal — it ignores expenses, financing and local taxes. Use it to shortlist, then run the yield and cash flow calculators on the survivors.
If a property costs 200,000 it should rent for at least 2,000 a month to pass the 1% rule. It's a fast way to screen many listings, but high-tax or high-cost areas may need more, while appreciation markets often fall below 1% and still make sense. Always confirm with full numbers.
It says a rental's monthly rent should be at least 1% of its purchase price. It's a quick screen to filter deals before deeper analysis.
In many hot markets it's hard to hit, while cash-flow markets clear it easily. Treat it as a starting filter, not a final decision.
The stricter 2% rule (rent ≥ 2% of price) flags very high cash-flow deals — rare today and often in higher-risk areas.
Screen with the 1% rule, then track the winners' real rent, costs and cash flow in RentFlow. Free to start.
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