1. What is the 1% Rule Rent Calculator?

Definition: This calculator estimates the monthly rental price a landlord should charge based on the 1% rule of thumb in real estate investing.

Purpose: It helps property owners determine a baseline rent that should cover expenses and provide positive cash flow.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Monthly Rent — Target rental income ($/month)
• Property Value — Total value or purchase price of the property ($)

Explanation: The 1% rule suggests that monthly rent should be at least 1% of the property's value to be a good investment.

3. Importance of the 1% Rule

Details: This rule helps ensure the rental income covers mortgage payments, taxes, maintenance, and other expenses while providing positive cash flow.

4. Using the Calculator

Tips: Enter the property's current market value or purchase price. The calculator will show the recommended minimum monthly rent.

5. Frequently Asked Questions (FAQ)

Q1: Is the 1% rule always achievable?
A: In high-cost areas, it may be difficult. The rule works best in moderately priced markets.

Q2: What if I can't charge 1% in my area?
A: Consider the 0.8% rule as a minimum threshold for positive cash flow.

Q3: Does this include property taxes and insurance?
A: No, the 1% rule is a gross rent estimate. You'll need to account for expenses separately.

Q4: Should I use purchase price or current value?
A: For new purchases, use purchase price. For owned properties, use current market value.

Q5: How does this compare to the 50% rule?
A: The 50% rule states that 50% of rent will go to expenses (excluding mortgage), while the 1% rule focuses on gross rent relative to property value.