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Rent-to-Price Ratio Calculator
Quickly screen rental opportunities using the rent-to-price ratio. See whether the deal passes the 1% or 2% rule, what price range hits those targets, and how it compares on gross rent multiplier.
Rent-to-price ratio
0.93%
monthly rent ÷ price
Gross rent multiplier
8.96×
price ÷ annual rent
1% rule
Fail
rent ≥ 1% of price each month
2% rule
Fail
rent ≥ 2% of price
Targets to make the numbers work
Max price to hit 1% rule
$265,000
at your current rent
Max price to hit 0.75%
$353,333
a more realistic modern threshold
Min rent to hit 1%
$2,850
at your current price
The 1% rule is a first-pass screen — it doesn't replace cap rate, cash flow, or DSCR analysis. Many markets haven't supported 1% rents for years, so 0.6%–0.8% is common today. Use this ratio to rank and reject deals quickly.
How to Use
- Enter the purchase price for the property.
- Enter the expected monthly rent based on market comparables, not current rent if the unit is underpriced.
- Check the rent-to-price ratio — above 1% passes the 1% rule, above 2% passes the 2% rule.
- Use the reverse calculations to see what price or rent the deal needs to pass 1% or 0.75% thresholds.
- Treat this as a fast first pass — always follow up with cap rate, cash flow, and DSCR before making an offer.
Frequently Asked Questions
What is the 1% rule?
The 1% rule is a quick rental property screen: monthly rent should be at least 1% of the purchase price. At 1%, a property usually has a reasonable chance of cash flowing after expenses and debt service, though this varies by market.
Does the 1% rule still work in today's market?
In many high-cost markets, the 1% rule is unreachable because prices have grown faster than rents. Investors in those markets often adopt a 0.7%–0.8% threshold and make up the difference through appreciation or tax advantages.
What is GRM and how does it relate to the rent-to-price ratio?
The gross rent multiplier is purchase price divided by annual rent. It's simply the inverse of the monthly rent-to-price ratio multiplied by 1/12. A 1% rule property has a GRM of ~8.3; a 0.5% property has a GRM of ~16.7.
Should I use current or market rent?
Use market rent — what you'd realistically get after turning the unit over. Buying off current, below-market rent creates false positives. Buying off an aspirational rent creates false negatives. Anchor to comps.
Related Calculators
Gross Rent Multiplier Calculator
Calculate GRM across properties to compare deals quickly.
Cap Rate Calculator
Pressure-test rent-to-price screens with a proper cap rate.
Rental Yield Calculator
Translate rent-to-price into gross and net rental yield.
Rental Property Calculator
Run a full cash-flow analysis once the property clears the screen.
Cash-on-Cash Return Calculator
Layer leverage onto the same property to see leveraged return.
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