Rental Property Calculator
Calculate monthly cash flow, NOI, cap rate, and cash-on-cash return for a rental property.
Written by Golam Rabbani, Founder & Lead Engineer
How to use this rental property calculator
- Enter the property purchase price, down payment %, mortgage rate, and term in years.
- In the Income panel, enter the expected monthly rent and a vacancy % (5–10% is a common assumption).
- In the Operating Expenses panel, enter annual property tax and insurance, plus maintenance % of rent, property management % of rent, monthly HOA, and any other monthly expenses.
- Press Calculate to see monthly cash flow, annual NOI, cap rate, and cash-on-cash return.
- Use Copy to save the result or Reset to start a fresh scenario.
About this rental property calculator
A rental property calculator quantifies whether a rental will be cash-flow positive and how attractive the return is, using three industry-standard metrics: monthly cash flow, capitalisation rate (cap rate), and cash-on-cash return. Net Operating Income (NOI) = (gross rent × (1 − vacancy)) × 12 − operating expenses × 12 (where operating expenses are property tax + insurance + maintenance + property management + HOA + other, but NOT debt service). Cap rate = NOI ÷ purchase price. Monthly cash flow = effective rent − mortgage P&I − monthly operating expenses. Cash-on-cash return = (annual cash flow ÷ initial cash invested) × 100. Mortgage P&I uses M = P × r(1+r)^n / ((1+r)^n − 1).
For example: a $350,000 property with 25% down ($87,500), 7% mortgage over 30 years, $2,500/mo rent, 5% vacancy, $4,200/yr property tax, $1,500/yr insurance, 5% maintenance and 8% management of rent gives a mortgage payment ≈ $1,746/mo, effective rent of $2,375/mo, operating expenses ≈ $800/mo, monthly cash flow ≈ −$171, annual NOI ≈ $18,900, cap rate ≈ 5.4%, and cash-on-cash ≈ −2.3%. The formulas align with the Appraisal Institute's "The Appraisal of Real Estate" (15th ed.) and the U.S. CCIM Institute's real-estate finance curriculum.
This tool is for estimation only and is not financial advice — talk to a qualified financial advisor, accountant, or real-estate professional before making an investment-property decision.
FAQ
- What is a "good" cap rate?
- Cap rate depends on the market and risk. Investors often target 5–10% in U.S. metro markets, but lower-risk Class-A properties may trade at 3–5% and higher-risk areas at 8%+. Compare against rates in your local market, not a universal threshold.
- Why is mortgage payment excluded from cap rate?
- Cap rate is meant to compare properties independent of how each buyer finances them. NOI uses operating expenses only — interest and principal are excluded. Cash-on-cash, which includes debt service, is the right comparison once you have a financing plan.
- What does "vacancy %" do?
- It reduces gross rent to account for months between tenants. A 5% vacancy on a $2,500/mo rent yields $2,375 effective monthly rent. Vary it to stress-test the return — 10% is a more conservative assumption.
- Is maintenance a % of rent or % of value?
- This tool uses % of rent (a "1% rule" is common — about 5% of rent). Some investors prefer % of purchase price (~1% per year). Pick the framing that matches your data and stay consistent across comparisons.
- Are property appreciation and tax deductions modelled?
- No — this is a current-year cash-flow and return view. Long-term appreciation, depreciation tax shield, and capital-gains treatment require a multi-year DCF and a tax advisor.
- Should I rely on this for the final purchase decision?
- Use it for estimation only. Closing costs, reserves, rehab costs, and local tax/legal specifics can change the picture significantly. Always consult a qualified financial advisor and a local real-estate professional.