The Rent-to-Value (RTV) ratio, also called the rent ratio, compares monthly rent to purchase price. It is the mathematical foundation of the 1% Rule.
Example: $1,800/month rent on a $180,000 property = 1.0% RTV.
Higher RTV = better income relative to price. Properties with 1%+ RTV historically support positive cash flow in most markets when using conventional financing with a standard down payment.
In expensive markets (coastal cities), 0.5–0.7% RTV is common and investors rely on appreciation rather than cash flow.
Related Terms
Cash Flow
Monthly or annual income remaining after all expenses and mortgage payments are paid.
Gross Rental Yield
Annual gross rent as a percentage of purchase price — a quick cross-market comparison metric.
1% Rule
A quick screening heuristic: monthly rent should be at least 1% of the purchase price to support positive cash flow.