Rental Property Calculator
Analyze a rental property investment. Calculate monthly cash flow, cash-on-cash return, cap rate, and gross rent multiplier using real expenses.
Calculation Inputs
Results computed instantly — your data never leaves your device.
Live Results
Real-TimeMonthly Cash Flow
-$436.18
Cash-on-Cash Return
-6.50%
Cap Rate
4.89%
Gross Rent Multiplier
11.7×
Net Operating Income
$17,120/yr
Monthly Mortgage (P&I)
$1,862.85
Total Cash Invested
$80,500
Total Annual Expenses
$33,734.16
Annual Income & Expense Breakdown
$30,000
−$1,500
$28,500
−$22,354.16
−$4,200
−$1,400
−$3,500
−$2,280
How to Use the Rental Property Calculator
- 1
Enter the purchase price, down payment, interest rate, and loan term.
- 2
Enter the expected monthly rent and set the vacancy rate (5–10% is typical).
- 3
Add annual property tax rate, insurance, maintenance (1% of value is standard), and property management fee.
- 4
Enter closing costs (2–3% is typical). All key metrics update instantly.
Formula & Mathematical Basis
Variable Key
NOINet Operating Income — income after all operating expenses but before mortgage debt service
CoCCash-on-Cash Return — annual cash flow ÷ total cash invested (down payment + closing costs)
Cap RateNOI ÷ Purchase Price — unlevered return, independent of financing
GRMGross Rent Multiplier — purchase price ÷ annual gross rent; lower is better
Vacancy%Expected percentage of time the property sits unoccupied or rent is uncollected
📝 Cap rate does not include mortgage payments — it reflects the unlevered yield on the asset. Cash-on-cash return reflects levered yield (uses debt). A positive cash flow does not guarantee a profitable investment; appreciation, equity paydown, and tax benefits must also be considered.
Step-by-Step Examples
Single-family rental — Midwest market
Scenario: $250,000 purchase, $50,000 down (20%), 7% rate, 30-yr term, $1,800/mo rent, 5% vacancy, 1.2% tax, $1,200 insurance, 1% maintenance, 8% management, 3% closing.
- 1.Loan: $200,000. Monthly P&I ≈ $1,331. Annual mortgage = $15,972.
- 2.Gross rent: $1,800 × 12 = $21,600. Vacancy loss (5%): $1,080. EGI: $20,520.
- 3.Operating expenses: Tax $3,000 + Insurance $1,200 + Maintenance $2,500 + Management $1,642 = $8,342.
- 4.NOI = $20,520 − $8,342 = $12,178. Cap rate = $12,178 ÷ $250,000 = 4.87%.
- 5.Cash flow = $12,178 − $15,972 = −$3,794/yr. Monthly: −$316.
- 6.Total cash invested = $50,000 + $7,500 closing = $57,500. CoC = −6.6%.
Cash-flowing duplex — Sun Belt market
Scenario: $350,000 duplex, $70,000 down, 7% rate, $2,800/mo combined rent, 5% vacancy, 1.3% tax, $1,600 insurance, 1% maint, 0% management (self-managed), 3% closing.
- 1.Loan: $280,000. Monthly P&I ≈ $1,863. Annual mortgage = $22,356.
- 2.EGI = $2,800 × 12 × 0.95 = $31,920.
- 3.Operating expenses: Tax $4,550 + Insurance $1,600 + Maintenance $3,500 = $9,650.
- 4.NOI = $31,920 − $9,650 = $22,270. Cap rate = 6.36%.
- 5.Cash flow = $22,270 − $22,356 = −$86/yr ≈ break-even.
- 6.CoC ≈ −0.1% (essentially zero). Equity paydown + appreciation = total return.
Practical Use Cases
- Screening rental properties before making an offer
- Comparing multiple investment properties side-by-side on cap rate and CoC
- Determining the maximum purchase price for a target CoC return
- Building a landlord cash-flow model to present to private lenders
- Evaluating the impact of raising rents on investment returns
- Stress-testing assumptions: what happens if vacancy rises to 10%?
Common Pitfalls
- Using gross rent without deducting vacancy — even 5% vacancy materially changes CoC.
- Omitting property management fees when self-managing — your time has a cost.
- Using purchase price as property value for tax calculations — always use current assessed/market value.
- Ignoring capital expenditure reserves (CapEx): roof, HVAC, appliances can cost $5,000–$20,000 unexpectedly.
- Assuming appreciation compensates for negative cash flow — appreciation is speculative; cash flow is contractual.
- Forgetting that NOI and cap rate are pre-financing metrics — using them post-mortgage is incorrect.
Frequently Asked Questions
What is cash-on-cash return?
Cash-on-cash return (CoC) measures the annual pre-tax cash flow divided by the total cash invested (down payment + closing costs). A CoC of 6–10% is generally considered good for a single-family rental.
What is cap rate?
Cap rate (capitalization rate) = Net Operating Income ÷ Purchase Price. It measures a property's return independent of financing. A cap rate of 5–10% is typical in most US markets. Use it to compare properties without the noise of different financing structures.
What is gross rent multiplier (GRM)?
GRM = Purchase Price ÷ Annual Gross Rent. A lower GRM indicates better value. Most residential markets fall between 8–15×. Divide 1 by the GRM to get a rough yield before expenses.
What vacancy rate should I use?
A 5% vacancy rate is a common default for long-term rentals in stable markets. Use 8–10% for higher-turnover areas or short-term rentals. Never assume 100% occupancy — even great properties have gap periods.
Should I include property management fees even if I self-manage?
Yes. Including an 8–10% management fee even if you self-manage captures the true economic cost — your time has value, and you may need management later. It also makes your underwriting more conservative and defensible.
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