One Percent Rule

The One Percent Rule is a simplified real estate investment screening guideline that states a rental property may be considered a viable investment candidate if the monthly rental income it generates equals or exceeds one percent of its total purchase price (including acquisition costs and renovation expenses). For example, under the one percent rule, a property purchased for ₹50 lakh should ideally generate at least ₹50,000 per month in gross rental income to clear the screening threshold. The rule provides a quick, rough filter for assessing whether a property's rental yield is sufficient to potentially cover mortgage payments and generate positive cash flow, without requiring detailed financial modelling. In India's major metros, where property prices are high relative to rental yields, the one percent rule is rarely met — making it more applicable in Tier 2 and Tier 3 cities or commercial property investments. For investors on Ventura Securities exploring real estate as an asset class or evaluating listed REITs, the one percent rule provides a quick benchmark for rental yield adequacy before conducting full due diligence.