Question 1

What is the 1% rule in real estate?

Accepted Answer

The 1% rule is a quick screening metric that states monthly rent should be at least 1% of the purchase price. For example, a {currency}200,000 property should rent for at least {currency}2,000/month. It helps investors quickly filter out properties unlikely to generate positive cash flow.

Question 2

Is the 1% rule realistic in the UK?

Accepted Answer

In most UK cities — especially London and the South East — the 1% rule is very difficult to achieve due to high property prices relative to rents. In more affordable areas (parts of the North, Midlands, Scotland), 0.6–0.8% is achievable. Use it as a starting screen, not a hard requirement.

Question 3

What should I do if a property fails the 1% rule?

Accepted Answer

Failing the 1% rule doesn't automatically make a property a bad investment. High-value areas with strong appreciation may still generate excellent total returns through equity growth. Always follow up with a full cash flow analysis and ROI calculation before making a decision.

1% Rule Checker

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