Rental Property Calculator
Analyze rental property investments with cash flow projections, cap rate, cash-on-cash return, ROI, and mortgage analysis. Compare buy-and-hold vs short-term rental strategies.
How to Use This Calculator
- Enter the purchase price and financing details (down payment, loan rate, term)
- Add acquisition costs (closing costs, renovation/repairs)
- Input your expected monthly rental income
- Set the vacancy rate for your market (typically 5-10%)
- Enter all operating expenses (taxes, insurance, HOA, maintenance, management)
- Optionally set growth assumptions (appreciation and rent increases)
- Click Calculate to see cash flow, ROI, cap rate, and projections
Purchase & Financing
Rental Income
Operating Expenses
Growth Assumptions
Understanding Cap Rate
Capitalization Rate (Cap Rate) measures the rate of return on a property based on the income it generates, independent of financing. It is calculated as Net Operating Income (NOI) divided by the purchase price. A higher cap rate indicates higher potential returns but often comes with higher risk. Typical cap rates range from 4-10% depending on location and property type.
Cash-on-Cash Return vs. Total ROI
Cash-on-Cash Return measures the annual pre-tax cash flow relative to the total cash you invested (down payment + closing costs + repairs). It tells you how hard your actual cash is working. Total ROI is broader and includes equity buildup through mortgage paydown and property appreciation. Both metrics matter: cash-on-cash shows your immediate returns, while total ROI shows long-term wealth building.
Common Investor Rules of Thumb
- 1% Rule: Monthly rent should be at least 1% of purchase price (e.g., $3,000/mo on a $300,000 property)
- 50% Rule: Expect about 50% of gross rent to go to operating expenses (excluding mortgage)
- DSCR > 1.25: Net Operating Income should cover at least 125% of your debt service for a healthy margin
- GRM < 15: A Gross Rent Multiplier under 15 generally indicates good value
These are starting points for screening deals, not definitive pass/fail criteria. Always analyze each property individually.
Save & Share Your Analysis
Your rental property analysis is automatically saved in the URL. You can bookmark this page to save your calculation, or use the Share button to send it to others. When you return or share the link, all values will be restored automatically.