Why it matters
The 1% rule is useful for quick filtering, but it is not a cash-flow model. Taxes, insurance, repairs, vacancy, management, financing, and location risk can wreck a property that passes the rule.
PropLurk take: The 1% rule can tell you what deserves a closer look. It cannot tell you what deserves your money.
- Monthly rent: $2,000
- Purchase price: $200,000
Result: $2,000 / $200,000 = 1.0%
Usually include
- Monthly market rent
- Purchase price
- Optional total basis if you include immediate rehab
- A follow-up NOI and cash-flow analysis
Do not mix in
- Operating expenses
- Debt service
- Vacancy
- Condition
- Neighborhood and management risk
Common ways investors mess this up
- Calling it cash flow
- Ignoring a huge rehab bill
- Comparing rent-including-utilities with tenant-paid-utility rent
- Rejecting or buying solely from this shortcut
How PropLurk uses it
PropLurk can use rent-to-price as a screen, then push the property into the full underwriting model where the real decision happens.
This guide is educational and does not provide investment, lending, tax, legal, or appraisal advice. Verify the specific property, lender, and local rules before making decisions.
Move past the shortcut and analyze the deal.
PropLurk keeps the definition, formula, assumptions, offer, and decision record connected so the number does not get lost in another spreadsheet.