Free screener · instant results · no signup
1% Rule Calculator Canada
Almost no Toronto or Vancouver rental clears the 1% rule — but the screen still helps you rank deals and spot the rare cash-flow property. Test the 1% rule, 2% rule, and GRM.
Educational calculators — always consult a licensed professional before making financial decisions.
The price you'd pay for the property.
Included in the all-in cost. Enter 0 if move-in ready.
Total gross rent across all units.
Rent-to-Price
0.50%
$2,600/mo on $515,000 all-in
The Screen
This is a screen, not a verdict. The 1% rule ignores expenses, financing, taxes, and appreciation. Use it to triage listings fast, then run the ones that pass through the cap rate and cash-flow tools.
Your Saved Scenarios
No saved scenarios yet
The 1% rule in a low-yield market
The 1% rule tests whether monthly rent reaches 1% of your all-in cost (price plus rehab). In Canada, where prices in major cities have far outpaced rents, the vast majority of properties fail it — a $700,000 condo would need $7,000/month in rent to pass. That doesn't make Canadian real estate a bad investment; it reflects a market where returns come largely from appreciation and mortgage paydown rather than day-one cash flow.
Use the screen to rank opportunities and to flag the occasional secondary-market or multi-unit property that actually cash-flows. Then confirm with the real numbers: a Canadian rental carries a 20% minimum down payment and no CMHC insurance, so financing weighs heavily. Move winners to the cap rate and cash-on-cash calculators.
How it works
Enter price and rehab
Input the purchase price and any upfront repairs for the all-in cost.
Enter expected rent
Add the total gross monthly rent.
Read the screen
See 1%/2% rule pass-fail and gross rent multiplier.
Why most Canadian rentals miss the 1% rule
| All-in cost | Rent needed for 1% | Typical actual rent |
|---|---|---|
| $500,000 | $5,000/mo | $2,400–2,800/mo |
| $700,000 | $7,000/mo | $2,800–3,400/mo |
| $900,000 | $9,000/mo | $3,400–4,200/mo |
Big-city Canadian rents fall far short of 1% — returns come from appreciation and paydown, not day-one cash flow.
Frequently asked questions
What is the 1% rule in real estate?+
The 1% rule is a quick screening test: a rental property's monthly rent should be at least 1% of the total amount you put into it (purchase price plus any rehab). For a $250,000 all-in property, that means about $2,500 a month in rent. It's a fast way to triage listings before doing detailed analysis — properties that clear it are worth a closer look, and those that miss it by a lot may struggle to cash-flow.
Is the 1% rule still realistic?+
In many high-priced markets it's hard to hit, and that alone doesn't disqualify a deal — appreciation-focused markets routinely fall short of 1% yet still make money over time. Treat the 1% rule as a screen, not a verdict. It ignores operating expenses, financing, taxes, and appreciation, so a property that passes can still be a poor deal, and one that fails can still be a good one after full analysis.
What is the 2% rule?+
The 2% rule is a stricter version — monthly rent of at least 2% of all-in cost. It's largely aspirational today and mostly appears in low-price, higher-risk markets. If a listing appears to clear 2%, verify the rent is real and sustainable before getting excited.
What is a good gross rent multiplier (GRM)?+
GRM is the property price divided by annual gross rent — the lower, the faster the rent pays back the price. A GRM of roughly 4–7 is generally considered attractive; higher figures are common in major cities, while a GRM above about 10 often signals overpricing relative to rent. Like the 1% rule, GRM ignores expenses, so it's a screening tool rather than a full measure of return.
Run your next deal through the numbers.
Back to the calculator ↑1% Rule Calculator Canada is built and maintained by the RealCostIQ editorial team. Cost ranges and rates are checked against published industry data and contractor quotes, and revised when the underlying figures move. Read our data methodology or more about who builds this. Every calculation runs in your browser — no account, and none of your inputs are stored.
Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.