Calculate rental property ROI, cash flow, cap rate, and cash-on-cash return. Includes mortgage analysis, expense breakdown, and multi-year projections.
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A rental property calculator helps investors evaluate whether a property will generate positive cash flow and strong returns. By analyzing purchase price, financing terms, operating expenses, and rental income, you can calculate key metrics like cap rate, cash-on-cash return, net operating income (NOI), and total investment return. Our calculator provides a comprehensive analysis with multi-year projections to help you make smarter investment decisions.
A rental property calculator is a financial analysis tool that evaluates the profitability of an investment property. It takes into account the purchase price, down payment, mortgage terms, operating expenses (property tax, insurance, maintenance, management), rental income, and vacancy rate to calculate metrics like Net Operating Income (NOI), Cap Rate, Cash-on-Cash Return, and projected cash flow. Investors use these metrics to compare properties and determine which offers the best return on investment.
Cap Rate Formula
Cap Rate = (NOI รท Purchase Price) ร 100See cap rate, cash-on-cash return, gross yield, and NOI for any rental property to determine if it's worth investing in.
Calculate monthly and annual cash flow after mortgage payments, taxes, insurance, maintenance, and vacancy losses.
View year-by-year property value appreciation, equity buildup, and cumulative cash flow over your planned holding period.
Instantly check if a property passes the 1% Rule and 50% Rule โ quick benchmarks used by experienced real estate investors.
Use presets for single-family homes, duplexes, condos, vacation rentals, and multi-family buildings to compare investment strategies.
See how depreciation deductions and mortgage interest reduce your taxable rental income and improve after-tax returns.
Evaluate your first rental property purchase by understanding all the costs, expected cash flow, and return metrics before making an offer.
Compare multiple properties side by side using cap rate, cash-on-cash return, and projected cash flow to find the best investment.
Calculate expected returns for Airbnb or VRBO properties with higher rent but increased vacancy and management costs.
See how different down payments, interest rates, or loan terms affect monthly cash flow and overall investment returns.
Analyze additional rental properties for your portfolio by understanding how each new property contributes to cash flow and equity buildup.
Verify seller-provided income and expense figures to ensure the deal pencils out before closing on an investment property.
A good cap rate generally ranges from 5% to 10%, depending on the market and property type. Cap rates of 6% or higher are considered good for most residential rental properties. Higher cap rates indicate potentially higher returns but may also signal higher risk or less desirable locations.
Cash-on-cash return is calculated by dividing annual pre-tax cash flow by the total cash invested. For example, if you invest $60,000 (down payment + closing costs) and earn $6,000 in annual cash flow, your cash-on-cash return is 10%. A good target is 8% or higher.
The 1% rule states that a rental property's monthly rent should be at least 1% of the purchase price. For example, a $200,000 property should rent for at least $2,000 per month. While not a guarantee of profitability, it's a quick screening tool to filter out poor deals.
Key expenses include mortgage payment, property taxes, insurance, maintenance (budget 1% of property value annually), vacancy losses (typically 5%), property management fees (8-12% of rent if using a manager), HOA fees, and a reserve for capital expenditures like roof replacement or HVAC systems.
Rental property depreciation allows you to deduct the cost of the building (not land) over 27.5 years. For a $250,000 property with 20% land value, the annual depreciation is ($200,000 / 27.5) = $7,273. At a 24% tax rate, this saves $1,745 annually in taxes, even though you didn't spend that money.
A 5% vacancy rate is standard for most residential rental markets, representing about 2-3 weeks of vacancy per year. For vacation or short-term rentals, use 20-30%. In areas with high demand, 3% may be realistic, while challenging markets may require 8-10%.
Rental property can be a good investment if the numbers work โ positive monthly cash flow, cap rate above 5-6%, and cash-on-cash return of 8%+ after all expenses. Key factors include current mortgage rates (around 7%), local market conditions, and your ability to manage or hire management.
NOI is the annual income a property generates after deducting all operating expenses but before mortgage payments. It's calculated as: NOI = Gross Rental Income ร (1 - Vacancy Rate) - Operating Expenses. NOI is used to calculate cap rate and is the most important metric for comparing rental properties.