Today I am going to explain the 1% rule and how it functions in Real Estate investing. The 1% rule is not necessarily a standard or law you have to follow. It is just a general rule of thumb. It is a quick way to make an assumption of whether or not a rental property will be worth your time and effort to analyze further. It does NOT guarantee that it will cash flow for you as there are many other factors to consider, but can be used to quickly see if a property will work to get you the returns you are looking for.