{
  "slug": "two-percent-rule-check",
  "title": "2% Rule Portfolio Screening Calculator",
  "heading": "2% Rule Check Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/two-percent-rule-check",
  "summary": "Screen a batch of rental candidates against the 2% rule and see how far off each one lands.",
  "description": "The 2% rule is a quick cash-flow screen used mainly for lower-priced, higher cash-flow markets: monthly rent should equal at least 2% of purchase price. It's stricter and less commonly achievable than the well-known 1% rule, and it's meant purely as a fast first-pass filter, not a substitute for full underwriting. This tool is built for screening several candidate properties at once against the 2% threshold and shows exactly how much rent each would need to clear it, or how far below the threshold it currently sits, which is more useful when you're triaging a list of ten listings down to two worth a real look.",
  "formula": "2% ratio = monthly rent ÷ purchase price × 100. Rent needed to hit 2% = purchase price × 0.02.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=two-percent-rule-check",
  "inputs": [
    {
      "id": "price1",
      "label": "Property 1 price",
      "kind": "number",
      "hint": null,
      "default": 95000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rent1",
      "label": "Property 1 monthly rent",
      "kind": "number",
      "hint": null,
      "default": 1350,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "price2",
      "label": "Property 2 price",
      "kind": "number",
      "hint": null,
      "default": 140000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rent2",
      "label": "Property 2 monthly rent",
      "kind": "number",
      "hint": null,
      "default": 1600,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "price3",
      "label": "Property 3 price",
      "kind": "number",
      "hint": null,
      "default": 78000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rent3",
      "label": "Property 3 monthly rent",
      "kind": "number",
      "hint": null,
      "default": 1700,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "passCount",
      "label": "Properties passing the 2% rule",
      "format": "number",
      "hint": null,
      "primary": true
    },
    {
      "id": "ratio1",
      "label": "Property 1: rent-to-price ratio",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "ratio2",
      "label": "Property 2: rent-to-price ratio",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "ratio3",
      "label": "Property 3: rent-to-price ratio",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "rentNeeded1",
      "label": "Property 1: rent needed to hit 2%",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Property 1 price: 95000 $",
      "Property 1 monthly rent: 1350 $",
      "Property 2 price: 140000 $",
      "Property 2 monthly rent: 1600 $",
      "Property 3 price: 78000 $",
      "Property 3 monthly rent: 1700 $"
    ],
    "outputs": [
      "Properties passing the 2% rule: 1",
      "Property 1: rent-to-price ratio: 1.42%",
      "Property 2: rent-to-price ratio: 1.14%",
      "Property 3: rent-to-price ratio: 2.18%",
      "Property 1: rent needed to hit 2%: $1,900"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter property 1 price ($).",
      "Enter property 1 monthly rent ($).",
      "Enter property 2 price ($).",
      "Enter property 2 monthly rent ($).",
      "Enter property 3 price ($).",
      "Enter property 3 monthly rent ($).",
      "Read your properties passing the 2% rule on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "price1": 57000,
        "rent1": 800,
        "price2": 84000,
        "rent2": 950,
        "price3": 47000,
        "rent3": 1025
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "price1": 95000,
        "rent1": 1350,
        "price2": 140000,
        "rent2": 1600,
        "price3": 78000,
        "rent3": 1700
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "price1": 152000,
        "rent1": 2150,
        "price2": 224000,
        "rent2": 2550,
        "price3": 125000,
        "rent3": 2725
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How is this different from the 1% rule?",
      "a": "The 1% rule sets a lower bar (rent ≥ 1% of price) and is achievable in more markets; the 2% rule is a much stricter screen mostly found in lower-priced Midwest and Southeast markets with sub-$150,000 purchase prices. Very few properties in expensive coastal metros will ever clear 2%, which is fine — it's a market-dependent screen, not a universal standard."
    },
    {
      "q": "Does passing the 2% rule mean the deal is good?",
      "a": "No — it's a first-pass filter only. A property clearing 2% in a market with high property taxes, high insurance, deferred maintenance, or declining population can still cash-flow negative once you run full numbers. Always follow up with a real cash flow and cap rate analysis before making an offer."
    },
    {
      "q": "Why do lower-priced properties clear this rule more easily?",
      "a": "Rent doesn't scale linearly with purchase price the way you might expect — a $75,000 house and a $300,000 house in the same metro often rent for much closer to each other than their price difference suggests, because rent is capped by what local tenants can actually afford to pay, not by what the house cost."
    },
    {
      "q": "What should I check next after a property passes?",
      "a": "Run full cash flow with realistic vacancy, maintenance, capex, and management reserves, verify the rent estimate against actual comparable listings (not just a Zestimate), and inspect the property or get a contractor's opinion on deferred maintenance — cheap properties clearing 2% often need real capital investment that a headline ratio hides."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/rent-roll-grm",
    "https://www.revenuelab.fyi/toolbox/vacancy-loss-calculator"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — 2% Rule Portfolio Screening Calculator (https://www.revenuelab.fyi/toolbox/two-percent-rule-check)"
}