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Healthy monthly cash flow
Estimated monthly cash flow is $286, leaving room to absorb a vacancy or repair.
Cash flow and ROI
Rental Property Calculator
Run a complete rental property cash flow analysis: monthly cash flow, ROI, cap rate, cash-on-cash return, DSCR, the 1% rule, break-even occupancy, and a year-by-year projection.
Your numbers
Overview
What is a rental property calculator?
A rental property calculator estimates a property's monthly cash flow, ROI, cap rate, cash-on-cash return, and long-term return from purchase price, rent, financing, vacancy, and operating expenses. Investors use it to compare properties, estimate rental income, and avoid negative cash flow.
What your scenario is telling you
Lender-friendly DSCR
DSCR of 1.23x clears the typical 1.20x to 1.25x DSCR-loan threshold.
Passes the 1% rule
Monthly rent is 1.02% of purchase price, clearing the classic 1% screen.
Cash flow, equity, and ROI over time
| Year | Gross income | Op. expenses | NOI | Cash flow | Property value | Loan balance | Equity | Cum. ROI |
|---|---|---|---|---|---|---|---|---|
| 1 | $30,600 | $9,752 | $18,400 | $3,431 | $257,500 | $185,595 | $71,905 | -17.4% |
| 2 | $31,518 | $10,007 | $18,989 | $4,020 | $265,225 | $183,553 | $81,672 | 1.0% |
| 3 | $32,464 | $10,269 | $19,597 | $4,628 | $273,182 | $181,363 | $91,819 | 20.7% |
| 4 | $33,437 | $10,538 | $20,225 | $5,255 | $281,377 | $179,015 | $102,362 | 41.8% |
| 5 | $34,441 | $10,813 | $20,872 | $5,903 | $289,819 | $176,497 | $113,322 | 64.4% |
| 6 | $35,474 | $11,096 | $21,539 | $6,570 | $298,513 | $173,797 | $124,716 | 88.4% |
| 7 | $36,538 | $11,387 | $22,228 | $7,259 | $307,468 | $170,901 | $136,567 | 114.0% |
| 8 | $37,634 | $11,685 | $22,938 | $7,969 | $316,693 | $167,797 | $148,896 | 141.3% |
| 9 | $38,763 | $11,991 | $23,671 | $8,702 | $326,193 | $164,468 | $161,725 | 170.2% |
| 10 | $39,926 | $12,305 | $24,427 | $9,458 | $335,979 | $160,898 | $175,081 | 200.9% |
| 11 | $41,124 | $12,627 | $25,207 | $10,237 | $346,058 | $157,071 | $188,988 | 233.3% |
| 12 | $42,358 | $12,958 | $26,011 | $11,041 | $356,440 | $152,966 | $203,474 | 267.7% |
| 13 | $43,628 | $13,298 | $26,840 | $11,871 | $367,133 | $148,565 | $218,568 | 304.0% |
| 14 | $44,937 | $13,646 | $27,696 | $12,727 | $378,147 | $143,846 | $234,302 | 342.3% |
| 15 | $46,285 | $14,004 | $28,579 | $13,609 | $389,492 | $138,785 | $250,706 | 382.8% |
How investors usually read these numbers
| Metric | Often strong | Watch out | Why it matters |
|---|---|---|---|
| Cash-on-cash return | 8% to 12%+ | Below 5% | Shows annual cash flow compared with the cash you actually invested. |
| Cap rate | 6% to 8%+ | Below local borrowing costs | Compares property income before debt across markets and property types. |
| DSCR | 1.25x or higher | Below 1.0x | Shows whether NOI covers annual debt service with a cushion. |
| 1% rule | Near or above 1.0% | Below 0.6% | Quickly compares monthly rent to purchase price before deeper underwriting. |
| Break-even occupancy | 15+ points below expected occupancy | Near expected occupancy | Estimates how much rent income can fall before the property stops cash flowing. |
How to run a rental property analysis
- 1
Enter property details
Fill in purchase price, closing costs, and any upfront repairs you expect to fund out of pocket.
- 2
Add rental income
Set the monthly rent based on local comps, plus any other income such as parking or pet fees.
- 3
Estimate operating expenses
Include vacancy, taxes, insurance, HOA dues, repairs, reserves, and property management.
- 4
Set financing terms
Enter down payment, interest rate, and loan term. Investment-property loans usually need 20% to 25% down.
- 5
Add long-term assumptions
Choose rent growth, expense growth, appreciation, hold period, and selling costs to model the 30-year projection.
- 6
Read the snapshot and projection
Review monthly cash flow, ROI, cap rate, cash-on-cash return, DSCR, the 1% rule, break-even occupancy, and the year-by-year table.
The math behind the result
Core formulas
- Effective rent = monthly rent x (1 - vacancy rate).
- Monthly cash flow = effective rent + other income - operating expenses - property management - mortgage payment.
- Cap rate = annual NOI / purchase price.
- Cash-on-cash return = annual cash flow / cash invested (down payment + closing + repairs).
- DSCR = annual NOI / annual debt service. Lenders typically want at least 1.20x to 1.25x.
- 1% rule = monthly rent / purchase price. A quick screen, not a verdict.
Expert takeaways
- Use cap rate to compare properties without financing noise. Use cash-on-cash return to test your actual leverage.
- Check DSCR before you fall in love with a deal. A property can have a strong cap rate and still struggle to cover debt.
- The 1% rule is a screen, not a rule. A deal under 1% can still work in high-appreciation markets if cash flow holds.
- Stress-test rent and vacancy together. Rents can stay flat while taxes, insurance, and maintenance keep climbing.
Key terms in plain English
- Cap rate
- Annual NOI / purchase price.
- Capitalization rate measures the unleveraged yield of a rental property. It is calculated as annual net operating income divided by purchase price. Cap rate ignores financing, so it is useful for comparing properties across markets.
- NOI
- Net operating income before debt service.
- Net operating income equals gross rent minus vacancy and operating expenses. It excludes mortgage payments, depreciation, and income taxes. NOI feeds cap rate and DSCR.
- Cash-on-cash return
- Annual cash flow / cash invested.
- Cash-on-cash return divides annual pre-tax cash flow by the cash you put into the deal, including down payment, closing costs, and rehab. It tells you the percentage return on the actual money in the deal each year.
- DSCR
- NOI / annual debt service.
- Debt service coverage ratio compares annual NOI with annual mortgage payments. Lenders typically want 1.20x to 1.25x or more to feel comfortable a property can cover its debt.
- 1% rule
- Monthly rent / purchase price.
- The 1% rule says a rental property's monthly rent should be at least 1% of the purchase price. It is a quick screen to filter deals before doing full underwriting, not a guarantee of profitability.
People also ask
- What is a rental property calculator?
- A rental property calculator is a tool that estimates a rental property's monthly cash flow, ROI, cap rate, cash-on-cash return, DSCR, and long-term return from purchase price, rent, financing, vacancy, and operating expenses. It helps investors compare properties and avoid negative cash flow before buying.
- How do you estimate rental property cash flow?
- Start with gross monthly rent, subtract a vacancy allowance, then subtract operating expenses, property management, reserves, and the mortgage payment. A simple cash-flow formula is: effective rent plus other income minus operating expenses minus debt service. Positive cash flow means the property has money left after regular costs.
- How do you calculate ROI on a rental property?
- For a financed rental, ROI is usually measured as cash-on-cash return: annual cash flow divided by upfront cash invested. Over a multi-year hold, total ROI also includes appreciation and loan payoff, while cap rate measures the unleveraged income return.
- What is a good ROI for rental property?
- A good rental property ROI depends on the market, leverage, and risk. Many investors look for 8% to 12%+ cash-on-cash return on leveraged rentals, while lower current returns may still make sense in markets with strong appreciation. Compare ROI against cap rate, DSCR, reserves, and local risk rather than using one number alone.
- What is a good cap rate for a rental property?
- A "good" cap rate depends on the market, but many U.S. residential investors target 6% to 8% in Class B and C markets, and accept 4% to 6% in Class A markets where appreciation is stronger. A cap rate below your borrowing rate is a warning sign on a leveraged deal.
- What is cap rate in real estate?
- Cap rate, or capitalization rate, is annual net operating income divided by property value or purchase price. It shows the unleveraged income yield of a rental property before mortgage payments, which makes it useful for comparing properties with different financing assumptions.
- What is the 1% rule in real estate?
- The 1% rule says monthly rent should be at least 1% of a property's purchase price. A $250,000 house should rent for at least $2,500 per month. It is a quick screen, not a full underwriting model, and many high-appreciation markets rarely meet it.
- Does this calculator include mortgage payments?
- Yes. The calculator estimates a fixed-rate principal and interest payment from the purchase price, down payment, interest rate, and loan term. It then subtracts the mortgage payment from NOI to estimate monthly cash flow and cash-on-cash return.
- How should I estimate operating expenses?
- Include all recurring owner-paid costs: property taxes, insurance, HOA dues, utilities you pay, repairs, capital expenditure reserves, landscaping, and pest control. Many investors model 35% to 50% of gross rent as expenses (the 50% rule) before they have actuals.
- How do you calculate depreciation on a rental property?
- Residential rental depreciation usually starts with the building portion of your basis, excluding land, and divides that amount over 27.5 years. For example, if $220,000 of a purchase is assigned to the building, straight-line depreciation is about $8,000 per year before any mid-month convention adjustment.
- Can a rental property calculator estimate taxes when selling?
- This calculator estimates pre-tax cash flow and sale proceeds, but it does not calculate the full tax bill at sale. Selling a rental can trigger capital gains tax, depreciation recapture, NIIT, and state tax. Use the 1031 exchange calculator and capital gains guide for sale-tax planning.
- Should I use a rental property calculator or Excel?
- A rental property calculator is faster for screening cash flow, ROI, cap rate, DSCR, and mortgage assumptions. Excel is useful when you want a custom model, extra tax fields, or portfolio-level tracking. Many investors use a calculator first, then move promising deals into a spreadsheet.
- What about taxes, depreciation, and insurance?
- This calculator estimates pre-tax cash flow. It assumes property taxes and insurance are inside the operating expenses field. Depreciation and your personal income tax rate are not modeled directly, but they can materially change after-tax returns.
Compare your result
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