Quick Rules Calculator
The fast screens experienced investors run in their head before they bother with a full analysis. Use these to triage a listing in seconds — then run the keepers through the detailed calculators.
1% & 2% Rule
A quick screen: monthly rent as a percentage of purchase price. ≥1% is a classic cash-flow filter; ≥2% is rare and aggressive.
Rent ÷ Price
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50% Rule
A back-of-envelope estimate that operating expenses (taxes, insurance, repairs, vacancy, management — not the mortgage) run about half of gross rent.
Est. Expenses
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Est. NOI (pre-debt)
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Subtract your mortgage payment from the estimated NOI to gauge cash flow.
Gross Rent Multiplier (GRM)
Price relative to annual gross rent — a fast way to compare deals. Lower is cheaper; typical ranges run roughly 4–8 depending on the market.
Price ÷ Annual Rent
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Net Operating Income (NOI)
Annual gross income minus operating expenses — before debt service. The number cap rate and commercial valuation are built on.
How to use these screens
These rules of thumb are filters, not verdicts. They exist to kill obvious non-starters and flag the deals worth a real underwrite — they deliberately ignore financing, condition, and local nuance. A property that passes the 1% rule and has a reasonable GRM has earned a full analysis; one that fails badly usually is not worth the time.
When a deal clears the quick screens, run it properly: the rental cash flow, cap rate, and cash-on-cash calculators account for the financing and expenses these shortcuts skip. Flipping instead? The 70% rule screen lives in the wholesale analyzer.