How is the 1% rule calculated? Can someone share the inputs?

[Robert Raffalo]

Is the 1% Rule simply calculated as:  Monthly Rental Income / Home Purchase Price?

[Aaron Poling]

The 1% rule basically says you want to be able to get 1% of your purchase price as gross monthly rent. Example: If the property will rent for 1k per month, then you don't want to pay over 100,000 also if you have to rehab you want to be all in at the 100k. 

This should be a quick qualifying tool to use, but you should gather more info and make your offers based on more than this rule. This will help you quickly know if something is a possibility or not. 

There are some great calculators available on Bigger Pockets to use for different strategies. 

Hope this helps! Aaron