What is the rent-to-price ratio and how do I use it?

Direct answer

Monthly rent ÷ purchase price, expressed as % — quick yield-screen for markets.

Expanded explanation

1% rule (rent ≥1% of price) is a screen, not a strategy. Markets with 0.7–0.9% can pencil with cash flow + appreciation mix.

Examples

• $150k purchase / $1,500 rent = 1.0% — strong.

More Market Analysis questions

• Which markets are best for cash flow in 2026?
• Which markets are best for long-term appreciation?
• How do I research a new market?
• Should my tenants be buying instead of renting?
• How do I know what cycle phase my market is in?
• Should I invest in rent-controlled markets?