Rental Property Calculator
Analyze rental property returns including cash flow, cap rate, and ROI.
Examples
Single-Family Rental at $250,000 Purchase Price
Duplex Generating Positive Cash Flow
Frequently Asked Questions
What is a good cap rate?
What is cash-on-cash return?
How is vacancy rate used?
Quick Tips
Double check your inputs. Ensure units match (e.g., inches vs cm).
How to Use This Calculator
Enter the property purchase details, expected rent, vacancy rate, and operating expenses. The calculator computes monthly cash flow, NOI, cap rate, cash-on-cash return, and annual ROI including equity buildup.
Understanding the Formula
NOI = Effective Gross Income - Operating Expenses. Cash Flow = NOI - Debt Service. Cap Rate = NOI / Purchase Price. Cash-on-Cash = Annual Cash Flow / Total Cash Invested. ROI = (Cash Flow + Principal Paydown) / Total Cash Invested.
Examples
Single-Family Rental at $250,000 Purchase Price
You buy a $250,000 rental property with 25% down ($62,500) and a $187,500 mortgage at 7.0% for 30 years. Monthly rent is $1,900. After a 5% vacancy rate, operating expenses of $650/month (taxes, insurance, maintenance, management), and a $1,247 mortgage payment, your monthly cash flow is about $-$102. However, with $299/month in principal paydown, your total return is positive. Cap rate: 6.0%. Cash-on-cash return: -1.9%.
Duplex Generating Positive Cash Flow
You purchase a duplex for $350,000 with 20% down ($70,000), financing $280,000 at 6.75% for 30 years. Both units rent for $1,400/month ($2,800 total). After 5% vacancy, $1,050/month in operating expenses, and a $1,816 mortgage payment, net monthly cash flow is about $-$196. Factoring in $440/month in principal paydown and 3% annual appreciation, your first-year total ROI is approximately 8.2%.
Frequently Asked Questions
What is a good cap rate?
Cap rates vary by market and property type. Generally, 4-6% is common in stable urban markets, while 7-10% may be found in higher-risk areas. A higher cap rate means higher potential return but often more risk.
What is cash-on-cash return?
Cash-on-cash return measures the annual pre-tax cash income earned on the cash invested. It considers only the actual cash flow relative to your out-of-pocket investment (down payment + closing costs).
How is vacancy rate used?
The vacancy rate reduces your gross rental income to estimate realistic income. A 5% vacancy means roughly 2-3 weeks per year without a tenant. Higher rates should be used in markets with less demand.