Do not make an offer based on that calculation.
If you're purchasing a property to live in, forget about what it'll rent for. That really doesn't matter. What does matter is how much the home is really worth. Have your Realtor do a CMA on the property to compare it with other recently-sold properties. The other things to consider, of course, are whether you can afford the house and whether you like the house. But if you're focusing on a calculation to determine whether to make an offer--and at what price--begin with the CMA and forget all about rental income.
If you're purchasing a property to rent out--as an investment property--forget all about that ratio. That really doesn't matter. What does matter is whether the property will cash flow. And, yes, that does depend on some extent on what the property costs and what it'll rent for. But it also depends on the type of financing, how much you put down, and other factors. And then, when you consider how much to put down, you have to look at your Return on Investment. Let's say you'd have to put $900,000 down in order to break even on cash flow (using your example above). Frankly, that'd be a horrible investment. You'd have a 0% return on a $900,000 investment. Put it in a bank at 2% and at least you'd end up with $18,000 a year with a lot less risk and hassle.
So: If you're buying it to live in, begin with the CMA.
If you're buying it as an investment property, figure out what you'd have to pay to get an acceptable positive cash flow. Then look at ROI to see if those numbers make sense.
Hope that helps.