Runs in your browser · Last updated 7 September 2026
Free 1% Rule vs Cap Rate Calculator
Free 1% rule vs cap rate calculator. Monthly rent ÷ price beside NOI ÷ price after vacancy and opex. Browser tool — nothing is uploaded.
The 1% rule is a screen: monthly rent ≥ 1% of price. It ignores vacancy and operating expenses. Cap rate (NOI ÷ price) is the same deal after those costs — that is why a “1%” listing can still be a 4% cap.
Rent ÷ price
0.79%
1% rent target
$2,800
1% rule
Misses
Rent vs 1% target
-$600
Cap rate
6.81%
NOI
$19,080
Gross yield
9.43%
How to use this tool
- Enter price and monthly rent.
- Add vacancy % and annual operating expenses for the cap-rate side.
- Read rent ÷ price, the 1% target, and NOI / cap rate on the same deal.
Worked example
$200,000 price and $2,000 rent hits 1% exactly. With 5% vacancy and $4,000 opex, NOI is $18,800 and cap rate is 9.4%. $400,000 with $2,200 rent is a 0.55% rent ratio — a 1% miss — and the cap rate after vacancy and opex is the number to compare with other listings. Continue on the cap rate calculator or break-even occupancy.
Frequently asked questions
- What is the 1% rule?
- A screening shortcut: monthly rent should be at least 1% of purchase price ($2,000 rent on a $200,000 house). It is not a valuation model and it ignores vacancy, taxes, and repairs.
- Why show cap rate next to it?
- Cap rate is NOI ÷ price after vacancy and operating expenses. A listing can pass 1% and still print a weak cap once insurance and taxes are in.
- Is 1% realistic in 2026 coastal markets?
- Often no. Many US metros clear 0.4–0.7%. Use the miss as a prompt to run cap rate and cash flow, not as an automatic reject everywhere.
- Does this include the mortgage?
- No. Cap rate is unlevered. Add a loan on the cash-flow page.
- Uploaded?
- No.