How to use the Rental Property calculator
- Enter purchase & loan details. Fill in purchase price, down payment, closing & repair costs, interest rate, loan term.
- Enter income details. Fill in monthly rent, other income / month, vacancy.
- Enter expenses details. Fill in property tax / yr, insurance / yr, HOA / month, maintenance & capex, property management, other expenses / month.
- Read your results. Results update instantly. The headline shows the monthly cash flow; the breakdown and table below show the details.
The key metrics
Cap rate = NOI ÷ purchase price
Cash flow = NOI − mortgage payments
Cash-on-cash = annual cash flow ÷ cash invested
DSCR = NOI ÷ annual debt service
Cap rate measures the property’s return before financing, so you can compare properties. Cash-on-cash measures your return on the cash you put in with your financing. DSCR above about 1.2–1.25 is what many lenders want on investment loans.
Don’t underestimate expenses
New investors often forget vacancy (5–8%), maintenance and capital expenses (roof, HVAC, appliances, often 5–10% of rent), and property management (8–10%) even if they self-manage now. The “50% rule” (operating expenses ≈ half of rent) is a rough sanity check.
What’s not included
Appreciation, principal paydown, depreciation and income taxes also affect total return but aren’t part of these first-year metrics.
Worked example
With these inputs (main ones shown): purchase price $300,000; down payment 25%; closing & repair costs $9,000; interest rate 7%; loan term 30y; monthly rent $2,400; vacancy 5%; property tax / yr $3,600.
The calculator gives a monthly cash flow of -$48 (-$581 per year after the mortgage). Other results: cap rate 5.79%, cash-on-cash return -0.69%, net operating income (NOI) $17,382/yr, debt service coverage (DSCR) 0.97×.
What your results mean
Positive monthly cash flow means rent covers all expenses and the mortgage. Cap rate compares properties regardless of financing; cash-on-cash shows what your own cash earns.
Tips
- Use realistic market rent from comparable listings.
- Budget for vacancy, maintenance and management even if you self-manage.
- Run the numbers at a higher interest rate before making an offer.
Frequently asked questions
How do I calculate cap rate?
Divide annual net operating income (rent minus vacancy and operating expenses, excluding mortgage) by the purchase price.
What is a good cash-on-cash return?
Many investors target 8–12%, but it depends on market, risk and how much appreciation you expect.
What is a good cap rate?
It depends on market and property type. Lower cap rates (4–5%) are common in expensive, stable markets; higher (7–10%) in cheaper or riskier areas.
What is the 1% rule?
A screening rule: monthly rent should be at least 1% of the purchase price. It’s rarely met in high-cost markets and ignores expenses, so use full analysis.
Is cash flow or appreciation more important?
Positive cash flow protects you in downturns; appreciation is less predictable. Most investors want both, but require cash flow.
Related calculators
Mortgage calculator · ROI calculator · Down Payment calculator · Debt-to-Income calculator · All mortgage & housing calculators