Cities That Pass the 1% Rule
The 1% rule states that monthly rent should be at least 1% of the purchase price. These cities meet that threshold, suggesting strong cash flow potential.
What is the 1% Rule? If a property costs $100,000, it should rent for at least $1,000/month. Properties meeting this rule typically generate positive cash flow even with conservative expense assumptions.
| # | City | Cap Rate | Cash Flow | Home Price | Rent (3BR) | Verdict |
|---|---|---|---|---|---|---|
| 1 | Detroit, MI | 10.5% | +$520/mo | $85,000 | $1,100/mo | 🟢 STRONG |
| 2 | Cleveland, OH | 9.8% | +$485/mo | $105,000 | $1,250/mo | 🟢 STRONG |
| 3 | Toledo, OH | 9.2% | +$470/mo | $95,000 | $1,000/mo | 🟢 STRONG |
| 4 | Rockford, IL | 9.0% | +$450/mo | $100,000 | $1,050/mo | 🟢 STRONG |
| 5 | Dayton, OH | 8.8% | +$430/mo | $110,000 | $1,100/mo | 🟢 STRONG |
| 6 | Peoria, IL | 8.6% | +$410/mo | $100,000 | $1,000/mo | 🟢 STRONG |
| 7 | Akron, OH | 8.5% | +$400/mo | $105,000 | $1,050/mo | 🟢 STRONG |
| 8 | Memphis, TN | 8.2% | +$380/mo | $135,000 | $1,350/mo | 🟢 STRONG |