property calculator

Rent-to-Price Ratio Calculator

Screen a rental on the 1% rule, on all-in cost, and on the price-to-rent ratio behind both.

Rent-to-price = monthly rent / purchase price x 100. The 1% rule wants 1.0%; most deals that close now sit between 0.7% and 0.9%. A $245,000 property renting at $1,850 is 0.755%, and a 1.0% ratio equals a price-to-rent ratio of exactly 8.33.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Purchase Price$

Monthly Rent$

Rehab Budget$

Closing Costs$

Monthly Operating Expenses$

Vacancy Allowance%

Results

Rent-to-Price Ratio

0.755%

Screening BandMixed market — 0.5% to 0.8%

Ratio on All-In Cost0.737%

All-In Cost$251,000

Price-to-Rent Ratio11.04 years

Gross Rent Multiplier11.04

Annual Gross Rent$22,200

Effective Rent After Vacancy$20,868

Gross Yield9.06%

Net Operating Income$11,508

Net Yield on All-In Cost4.58%

Passes the 1% RuleNo

Rent Needed for 1%$2,450

Price Needed for 1% at This Rent$185,000

Gap to the 1% Rule$600 per month short

Tip

Useful for triaging a list of properties in seconds each, and useful again when a deal that passed the headline screen needs checking against the money you will actually spend.

Formula

Rent-to-price and its inverses

Rent-to-price %      = Monthly rent / Purchase price x 100
Rent-to-all-in %     = Monthly rent / (Price + Rehab + Closing) x 100
Price-to-rent ratio  = Purchase price / (Monthly rent x 12)
Gross rent multiplier= the same figure, named differently
Gross yield %        = Annual rent / Price x 100
Net yield %          = (Effective rent - Operating expenses) / All-in cost x 100

Rent-to-price and price-to-rent are the same relationship read from opposite ends: a 1.0 percent monthly ratio is a price-to-rent ratio of 8.33 and a gross rent multiplier of 8.33. The 1% rule is the version of this that most investors quote, and it is a screen rather than an analysis — it says nothing about the rate, the taxes, or the condition of the roof.

Step by step

How the calculation works

1Enter the price you would actually pay and the rent the property would actually achieve. Both are places where wishful thinking enters an underwriting model: use the negotiated price rather than the asking price, and a rent supported by comparable listings that have already leased rather than by ones still sitting on the market.
2Read both ratios. The headline rent-to-price figure uses the purchase price alone, which is what the 1% rule means, but a deal needing $35,000 of rehab is not the same deal. A $120,000 house renting at $1,250 passes the 1% rule at 1.042 percent and drops to 0.786 percent once $35,000 of rehab and $4,000 of closing costs are included.
3Calibrate the threshold to the market you are in. The 1% rule dates from a period of much cheaper property relative to rents, and in most metros in 2026 the deals that actually close sit between 0.7 and 0.9 percent. Under about 0.5 percent, a property is an appreciation bet rather than a cash-flow one, which is a legitimate strategy but a different one.
4Use this to screen, not to decide. The ratio ignores the interest rate, property taxes, insurance, HOA dues, management, capital expenditure and the condition of the building — and any one of those can turn a 1 percent property into a loss. What it does well is let you discard most listings in a few seconds so you can underwrite the rest properly.
5When a deal passes the screen, take it to the full model. The [rental yield calculator](/calculators/rental-yield-calculator) works through gross and net yield with vacancy and operating expenses, the [gross rent multiplier calculator](/calculators/gross-rent-multiplier-calculator) is the same ratio expressed the way appraisers use it, and the [cash-on-cash return calculator](/calculators/cash-on-cash-return-calculator) brings financing into the picture.

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Rental Yield Calculator

Gross and net yield once vacancy and operating expenses are counted.

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Gross Rent Multiplier Calculator

The same relationship in the form appraisers and brokers quote.

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Cash-on-Cash Return Calculator

What the deal returns once financing and real cash invested are included.

property calculator

Rent-to-Price Ratio Calculator

Screen a rental on the 1% rule, on all-in cost, and on the price-to-rent ratio behind both.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Purchase Price$

Monthly Rent$

Rehab Budget$

Closing Costs$

Monthly Operating Expenses$

Vacancy Allowance%

Results

Rent-to-Price Ratio

0.755%

Screening BandMixed market — 0.5% to 0.8%

Ratio on All-In Cost0.737%

All-In Cost$251,000

Price-to-Rent Ratio11.04 years

Gross Rent Multiplier11.04

Annual Gross Rent$22,200

Effective Rent After Vacancy$20,868

Gross Yield9.06%

Net Operating Income$11,508

Net Yield on All-In Cost4.58%

Passes the 1% RuleNo

Rent Needed for 1%$2,450

Price Needed for 1% at This Rent$185,000

Gap to the 1% Rule$600 per month short

Tip

Useful for triaging a list of properties in seconds each, and useful again when a deal that passed the headline screen needs checking against the money you will actually spend.

Summary

Key output metrics

Rent-to-Price Ratio

0.755%

Mixed market — 0.5% to 0.8%

On All-In Cost

0.737%

$251,000 including rehab and closing

Price-to-Rent Ratio

11.04

years of gross rent to equal the price

D3 visualization

Where This Deal Sits

The rent-to-price ratio measured against the screening thresholds investors actually use in current markets.

Guide

How to understand and use this calculator

Quick Answer — What Is a Good Rent-to-Price Ratio?

Divide monthly rent by purchase price and multiply by 100. The 1% rule says a rental should reach 1.0 percent, which is a $1,750 rent on a $175,000 house. It is a screen, not an analysis, and in most metros in 2026 it is a screen almost nothing passes.

The bands investors actually work to now:

1.0 percent and above — passes the classic rule; rare outside low-cost markets
0.8 to 1.0 percent — cash flow is plausible; where most deals that close sit
0.5 to 0.8 percent — mixed; cash flow depends heavily on the financing
Below 0.5 percent — an appreciation bet rather than a cash-flow one

A $245,000 property renting at $1,850, with $6,000 of closing costs, $780 a month of operating expenses and a 6 percent vacancy allowance:

Rent-to-price — 0.755 percent; on all-in cost — 0.737 percent
Price-to-rent ratio and gross rent multiplier — 11.04
Gross yield — 9.06 percent; net yield on all-in cost — 4.58 percent
Rent needed to reach 1 percent — $2,450, a gap of $600 a month

The ratio and the price-to-rent figure are the same relationship read from opposite ends: 1.0 percent monthly is a price-to-rent ratio of exactly 8.33.

How to Use This Calculator: A $245,000 Rental

Enter the price you would actually pay and the rent the property would actually achieve. Both are where optimism enters an underwriting model. Use a negotiated price rather than an asking price, and a rent supported by comparable properties that have already leased rather than by listings still sitting on the market.

The headline ratio comes back at 0.755 percent — in the mixed band, not passing the 1 percent rule, and typical of a mid-priced single-family rental in a moderate market.

Add rehab and closing costs to see the all-in version. At $6,000 of closing costs and no rehab the difference is small, taking the ratio to 0.737 percent. On a property needing work the difference is not small at all, and that is the whole reason both figures are shown.

Enter operating expenses and vacancy for the yield lines. At $780 a month of expenses and 6 percent vacancy, net operating income is $11,508 a year, a net yield of 4.58 percent on all-in cost against a gross yield of 9.06 percent.

That gap between gross and net is the honest reason the 1 percent rule exists. It is a crude proxy for the fact that roughly half of gross rent disappears into expenses and vacancy before a mortgage payment is made.

The Formulas This Calculator Uses

Rent-to-price % = Monthly rent ÷ Purchase price × 100.

Rent-to-all-in % = Monthly rent ÷ (Price + Rehab + Closing costs) × 100.

Price-to-rent ratio = Purchase price ÷ (Monthly rent × 12). Numerically identical to the gross rent multiplier.

Gross yield % = Annual rent ÷ Price × 100, which is simply the monthly ratio × 12.

Net operating income = Annual rent × (1 − vacancy %) − Annual operating expenses.

Net yield % = Net operating income ÷ All-in cost × 100.

Rent needed for 1 percent = Price × 0.01. Price needed for 1 percent = Monthly rent × 100.

Those last two are the most actionable outputs on the page. They convert a ratio nobody negotiates over into a rent figure or a price figure that can go into an offer.

A Second Example: Why the All-In Ratio Matters

Take a $120,000 house renting at $1,250, needing $35,000 of rehab with $4,000 of closing costs.

On price alone the ratio is 1.042 percent — it passes the 1 percent rule, and on a spreadsheet of listings it would be flagged as one of the good ones.

On all-in cost of $159,000 it is 0.786 percent. The same property, screened on the money actually spent, drops out of the passing band into the plausible one. Nothing about the property changed; the headline ratio was simply measuring the wrong denominator.

This is the most common way the 1 percent rule misleads. The rule was formulated for turnkey purchases, and applying it to a value-add deal without adding the rehab budget flatters exactly the properties that need the most scrutiny.

At the other end. A $620,000 property renting at $3,200 with $14,000 of closing costs gives 0.516 percent on price and a price-to-rent ratio of 16.15. Net yield on all-in cost is 3.10 percent. That is a property whose case rests on appreciation and on principal paydown rather than on cash flow — a legitimate strategy, and a different one from what the 1 percent rule was designed to screen for.

Once a deal passes the screen, take it to the full model: the rental yield calculator works through gross and net yield properly, and the cash-on-cash return calculator brings financing into the picture.

Using the Rule Without Being Misled by It

The 1 percent rule is a filter, not a verdict. It exists so you can discard most listings in a few seconds and spend real time on the rest. Treating it as an investment criterion in a market where almost nothing reaches 1 percent means never buying anything, which is not a strategy.

It ignores everything that determines whether a rental works. The interest rate, property taxes, insurance, HOA dues, management fees, capital expenditure and the age of the roof are all absent. Two properties with identical ratios can differ by hundreds of dollars a month in cash flow on taxes alone, and high-tax jurisdictions break the rule badly.

Calibrate to your market and revisit it. The rule dates from a period when property was far cheaper relative to rents. In 2026, deals that actually close in reasonable markets sit mostly between 0.7 and 0.9 percent, and holding out for 1.0 percent means restricting yourself to lower-priced markets — which come with their own tenant, maintenance and appreciation characteristics.

The price-to-rent ratio is the same number, and it is the version to use when comparing markets. Below about 15 suggests buying is cheap relative to renting; above about 20 suggests the opposite. It maps directly onto the monthly ratio: 8.33 is 1 percent, 10.42 is 0.8 percent, 16.67 is 0.5 percent.

Screen on all-in cost when there is rehab. The single change that makes this ratio behave sensibly on value-add deals is putting the rehab budget in the denominator, which is why both versions are shown here rather than just the famous one.

Limitations

This is a screening ratio and it deliberately ignores financing. Two identical properties bought at different rates and different leverage produce completely different cash flow from the same ratio, and financing is usually the largest single variable in whether a rental works.

Operating expenses are entered as a single monthly figure. Real expenses are lumpy and seasonal, and capital expenditure — a roof, a furnace, a full turnover between tenants — arrives in multi-thousand-dollar increments that a monthly average smooths away entirely. A property can show positive cash flow for four years and lose all of it in the fifth.

Rent is treated as a fixed input. In practice it is a range, it depends on condition and management, and the difference between a market rent and an achievable rent is where new investors are most often wrong.

The bands are conventions, not standards. They reflect what investors report deals closing at in current markets, and they will drift as prices, rents and rates move. Treat them as orientation rather than as thresholds with authority behind them.

Related Calculators

The rent-to-price ratio is the first filter; everything after it needs more inputs. The rental yield calculator works through gross and net yield with vacancy and operating expenses properly separated. The gross rent multiplier calculator expresses the same relationship in the form appraisers and brokers use. The cash-on-cash return calculator adds financing and gives the figure investors actually compare deals on, and the rental property ROI calculator builds the full operating picture including the expenses a ratio cannot see.

Related concepts

The 1% Rule

Monthly rent of at least 1 percent of purchase price. A fast screen designed for turnkey purchases, and one that flatters value-add deals if rehab is left out.

Price-to-Rent Ratio

Price over annual rent. The same relationship as rent-to-price, inverted, and the version to use when comparing whole markets rather than individual deals.

All-In Cost

Price plus rehab plus closing costs — the money actually spent. Screening on this rather than on price is what stops a ratio from misleading on a value-add deal.

Frequently Asked Questions

What is the 1% rule in real estate?+

A screening rule that a rental's monthly rent should be at least 1 percent of the purchase price — $1,750 a month on a $175,000 house. It is a filter for discarding listings quickly, not an analysis, and it says nothing about the interest rate, taxes, insurance or condition.

What is a good rent-to-price ratio in 2026?+

Most deals that actually close in reasonable markets sit between 0.7 and 0.9 percent. Above 1.0 percent passes the classic rule and is rare outside low-cost markets; below 0.5 percent the property is an appreciation bet rather than a cash-flow one.

How do I calculate rent-to-price ratio?+

Divide monthly rent by purchase price and multiply by 100. A $245,000 property renting at $1,850 gives 0.755 percent. On all-in cost including rehab and closing costs it gives 0.737 percent — and that second figure is the one to use whenever the property needs work.

What is the difference between rent-to-price and price-to-rent?+

They are the same relationship inverted. Rent-to-price is monthly rent over price as a percentage; price-to-rent is price over annual rent as a multiple. A 1.0 percent monthly ratio is a price-to-rent ratio of exactly 8.33, 0.8 percent is 10.42, and 0.5 percent is 16.67.

Should rehab costs go in the ratio?+

Yes, whenever there are any. A $120,000 house renting at $1,250 passes the 1 percent rule at 1.042 percent, and with $35,000 of rehab and $4,000 of closing costs the all-in ratio is 0.786 percent. The headline rule was formulated for turnkey purchases and flatters value-add deals that need the most scrutiny.

Is the 1% rule still realistic?+

Rarely, at current prices and rates outside low-cost markets. Holding out for 1.0 percent restricts you to cheaper markets, which carry their own tenant, maintenance and appreciation characteristics. Most investors have recalibrated to 0.8 percent as the practical screen and underwrite properly from there.

What is a gross rent multiplier?+

Purchase price divided by annual gross rent — numerically identical to the price-to-rent ratio, and the form appraisers and brokers usually quote. A $245,000 property renting at $1,850 a month has a gross rent multiplier of 11.04, meaning eleven years of gross rent equals the price.

Why is my net yield so much lower than my gross yield?+

Because roughly half of gross rent disappears before a mortgage payment is made. On the worked example, a 9.06 percent gross yield becomes a 4.58 percent net yield once vacancy and $780 a month of operating expenses are counted — and that is before financing. This gap is the reason a crude ratio like the 1 percent rule exists.

Formula

Rent-to-price and its inverses

Rent-to-price %      = Monthly rent / Purchase price x 100
Rent-to-all-in %     = Monthly rent / (Price + Rehab + Closing) x 100
Price-to-rent ratio  = Purchase price / (Monthly rent x 12)
Gross rent multiplier= the same figure, named differently
Gross yield %        = Annual rent / Price x 100
Net yield %          = (Effective rent - Operating expenses) / All-in cost x 100

Step by step

How the calculation works

1Enter the price you would actually pay and the rent the property would actually achieve. Both are places where wishful thinking enters an underwriting model: use the negotiated price rather than the asking price, and a rent supported by comparable listings that have already leased rather than by ones still sitting on the market.
2Read both ratios. The headline rent-to-price figure uses the purchase price alone, which is what the 1% rule means, but a deal needing $35,000 of rehab is not the same deal. A $120,000 house renting at $1,250 passes the 1% rule at 1.042 percent and drops to 0.786 percent once $35,000 of rehab and $4,000 of closing costs are included.
3Calibrate the threshold to the market you are in. The 1% rule dates from a period of much cheaper property relative to rents, and in most metros in 2026 the deals that actually close sit between 0.7 and 0.9 percent. Under about 0.5 percent, a property is an appreciation bet rather than a cash-flow one, which is a legitimate strategy but a different one.
4Use this to screen, not to decide. The ratio ignores the interest rate, property taxes, insurance, HOA dues, management, capital expenditure and the condition of the building — and any one of those can turn a 1 percent property into a loss. What it does well is let you discard most listings in a few seconds so you can underwrite the rest properly.
5When a deal passes the screen, take it to the full model. The [rental yield calculator](/calculators/rental-yield-calculator) works through gross and net yield with vacancy and operating expenses, the [gross rent multiplier calculator](/calculators/gross-rent-multiplier-calculator) is the same ratio expressed the way appraisers use it, and the [cash-on-cash return calculator](/calculators/cash-on-cash-return-calculator) brings financing into the picture.

Related guides

Learn more about this calculation

Guide

Rent-to-Price Ratio Calculator

Inputs

Results

Rent-to-price and its inverses

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Rental Yield Calculator

Gross Rent Multiplier Calculator

Cash-on-Cash Return Calculator

Key facts

Rent-to-Price Ratio Calculator

Inputs

Results

Key output metrics

Where This Deal Sits

How to understand and use this calculator

Quick Answer — What Is a Good Rent-to-Price Ratio?

How to Use This Calculator: A $245,000 Rental

The Formulas This Calculator Uses

A Second Example: Why the All-In Ratio Matters

Using the Rule Without Being Misled by It

Limitations

Related Calculators

Related concepts

Frequently Asked Questions

Rent-to-price and its inverses

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Rental Yield Calculator

Gross Rent Multiplier Calculator

Cash-on-Cash Return Calculator

Key facts

Key output metrics

Where This Deal Sits

How to understand and use this calculator

Quick Answer — What Is a Good Rent-to-Price Ratio?

How to Use This Calculator: A $245,000 Rental

The Formulas This Calculator Uses

A Second Example: Why the All-In Ratio Matters

Using the Rule Without Being Misled by It

Limitations

Related Calculators

Related concepts

Frequently Asked Questions