The New (Better) 1% Rule for Real Estate

Dave Meyer introduces a new rule of thumb for analyzing rental property cash flow: the rent-to-payment ratio. He explains why the classic 1% rule is broken in 2026 because it ignores mortgage rates, taxes, and insurance, which have all risen. The new ratio compares estimated rents directly to the PITI payment, giving a clear yes/no on whether a deal will cash flow. Dave also shares a market-ranking spreadsheet that highlights U.S. cities with the best rent-to-payment ratios, helping investors quickly spot opportunities.