What is a One Percent rent rule?

The one percent rule can provide a baseline for establishing the level of rent that commercial property owners charge on real estate space. This rent level can apply to all types of tenants in both residential and commercial real estate properties. Purchasing a piece of property for investment requires a thorough analysis of numerous factors.

How do you calculate a rent payment using the one percent rule?

Using the one percent rule, the owner would calculate a $2,000 monthly rent payment: $200,000 multiplied by 1%. In this case, the investor would seek a mortgage loan with monthly payments of less than and absolutely no more than $2,000. The One Percent Rule vs. Other Types of Calculations

How do you calculate monthly rent based on purchase price?

To apply the 1% rule, you can either multiply the property’s purchase price by 1% or move the decimal point in the purchase price two places to the left. The result should be the minimum you consider charging in monthly rent. Purchase price ✕ 0.01 = Monthly rent