Perform quick investment analysis. Determine monthly cash flow, cap rate, Net Operating Income (NOI), and Cash on Cash ROI to evaluate property deals.
Monthly net cash flow
Assumptions yield positive monthly cash flow.
Cash on cash
0.0%
Cap rate
0.0%
Start with the purchase, loan, and cash needed to get into the deal.
The purchase price of the property.
Percentage of purchase price paid upfront.
Annual mortgage interest rate.
Length of the loan in years.
Escrow, loan fees, inspections, and initial cosmetic repairs.
Add the recurring rent, reserves, and owner expenses that shape monthly cash flow.
Estimated gross monthly rental income.
Storage, laundry, or parking fees per month.
Total annual property tax amount.
Total annual property insurance premiums.
Homeowners association fees per month.
Reserve rate for unoccupied periods.
Reserve rate for physical repairs.
Monthly property manager commission.
Monthly income
$2,500
Mortgage
$0/Mo
Loan amount
$240,000
Successful real estate investing isn't about gut feelings or market hype—it's about the numbers. Our Rental Property Calculator provides a deep dive into the profitability of a potential investment property. By accounting for income, fixed/variable expenses, and financing costs, you can determine if a property will generate positive cash flow or become a money pit.
To make an informed decision, you need to understand three core metrics that this calculator outputs:
The net profit you pocket every month after all bills (mortgage, taxes, insurance, repairs) are paid. Positive cash flow is the lifeblood of a rental business.
Measures the return on the actual cash you invested. If you outlaid $50,000 and get $5,000 in annual cash flow, your Cash on Cash ROI is 10%.
Evaluates the pure potential of the property itself, ignoring financing. It is calculated by dividing the Net Operating Income (NOI) by the purchase price.
A quick screening tool for investors is the 1% Rule. It states that the monthly rent should be at least 1% of the purchase price. For example, a $200,000 house should rent for at least $2,000/month. While harder to find in modern high-price markets, properties meeting this rule are much more likely to cash flow positively.
New investors often overestimate profit by forgetting "hidden" costs. Our calculator includes fields for these crucial reserves:
Most experienced real estate investors target a Cash on Cash return of 8% to 12% or higher. However, a 'good' return depends heavily on your local market, property condition, and interest rates. In high-growth metropolitan areas, investors might accept 4% to 6% because they expect high long-term appreciation.
Cap Rate evaluates the asset's performance independent of financing, calculated by dividing Net Operating Income (NOI) by the purchase price (assuming cash purchase). Cash on Cash ROI measures the return on the actual money you outlaid out-of-pocket (down payment + closing costs), taking your mortgage payments into account. Cap Rate is best for comparing properties, while Cash on Cash ROI is best for measuring actual wealth growth.
The 1% rule is a quick screening tool suggesting that a rental property's gross monthly rent should be at least 1% of its total purchase price (e.g., renting a $200,000 property for $2,000/month). While extremely rare in high-price modern markets, properties meeting this rule have a much higher likelihood of producing positive monthly cash flow.
You must account for: mortgage payments, property taxes, insurance, HOA fees, property management (usually 8-10% of rent), vacancy rate allowance (typically 5-8% to cover empty periods), and maintenance/repairs (generally 5-10% of rent). Neglecting these vacancy and maintenance reserves is the most common reason new investors lose money.
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