BrickAtlasCalculators1% rule
1% rule calculator
Divide monthly rent by the purchase price. The classic rule passes when rent is at least 1% of price. BrickAtlas market screens also watch a near-1% line at 0.85%.
Check the 1% rule
Enter the purchase price and the monthly rent. The ratio updates as you type, along with the rent you would need to hit 1% of price.
Rent-to-price ratio
1.14%
$2,100 monthly rent ÷ $185,000 purchase price.
- Classic 1% rule
- Meets
- Near 1% screen (0.85%)
- Meets
- Rent for a classic 1%
- $1,850
- Shortfall to 1%
- $0
How the 1% rule is calculated
Rent-to-price = monthly rent ÷ purchase price
The classic 1% rule passes when that ratio is at least 1% — monthly rent is at least the purchase price times 0.01. BrickAtlas stores the same ratio in percent points for market ranking. A result of 1.00% is the classic line. The near-1% screen used for metro Match is 0.85%.
The sample rent of $2,100 on a $185,000 price is 1.14% of price. The classic 1% rule needs $1,850 a month.
It is not cash flow
The rule ignores vacancy, taxes, insurance, maintenance, management, and the mortgage. A property can pass 1% and still lose money every month.
Classic and near are different lines
Passing 0.85% means the rent is inside BrickAtlas’s near-1% market screen. It does not mean the classic 1% rule passed. This page shows both.
Price is the purchase price
The denominator is the price you enter, not price plus rehab. Cap rate and cash flow are the screens that know about the operating statement.
What this number doesn’t tell you
The 1% rule is a rent-to-price glance. It does not underwrite the property or prove the metro fits. BrickAtlas uses the near-1% line as one Match signal, then still runs persona, markets, listings, and a strategy-aware Investment Memo.
The bills the rule skips
Cash flow subtracts vacancy, operating expenses, and the mortgage. Two houses with the same 1% ratio can land on opposite cash flow once those lines are in.
Yield on the price
Cap rate uses a year of NOI, not a month of gross rent. Gross rent can clear 1% of price while NOI is thin.
Whether this market fits
Explore already scores median rent against median price, including the near-1% screen. A single listing can pass while the metro is still a poor match.
FAQ
- What is the 1% rule in real estate?
- The classic 1% rule says monthly rent should be at least 1% of the purchase price. Rent of $2,000 on a $200,000 price is 1% and meets the rule. Rent of $1,500 on that price is 0.75% and does not.
- What is the near 1% rule BrickAtlas uses?
- Market Match treats 0.85% of price as the near-1% line. A listing or a metro can sit between 0.85% and 1% and pass the near screen while missing the classic rule. This calculator shows both checks.
- Does the 1% rule include expenses?
- No. It is monthly rent divided by purchase price. Vacancy, taxes, insurance, repairs, management, and the mortgage are all outside it. Use the cash flow calculator once the ratio looks interesting.
- Is this the same rent-to-price math as Explore?
- Yes. Explore divides median rent by median price and compares the percent to the classic 1% reference and the 0.85% near-1% target. This page runs that ratio on a price and rent you type.
- Where should I go after a 1% screen?
- If the ratio is close, open the cash flow calculator or Analyst and put expenses and the loan in. If you are comparing cities, start in Explore, where this yield is already part of Match.
See whether the rent survives expenses
Set a persona, explore metros by rent yield and Match, and underwrite the address with a full operating statement.
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