How to use the rental property calculator
- Under Purchase and loan, enter the purchase price, down payment, closing costs, any repairs before renting, and your mortgage interest rate and term. Enter the full price as the down payment for an all-cash purchase.
- Under Rent and running costs, enter the monthly rent, yearly property tax and insurance, and monthly HOA or landlord-paid utilities.
- Set repairs and upkeep, vacancy and property management as a percentage of rent. Use 0 for management if you will self-manage.
- Read the monthly cash flow, cash-on-cash return and cap rate, then check the break-even rent line and the detail list.
How the numbers are worked out
Net operating income (NOI) is rent minus operating expenses, where expenses include vacancy but not the mortgage. Cash flow is NOI minus the monthly principal and interest payment, which uses the standard amortization formula. Cash-on-cash return is a year of cash flow divided by all the cash you put in: down payment, closing costs and repairs. Cap rate is yearly NOI divided by the price, so it ignores financing. The debt service coverage ratio is NOI divided by the mortgage payment; the OCC's commercial real estate lending handbook explains how lenders use it and cap rates.
Worked example with the default inputs
A $250,000 rental bought with $50,000 down leaves a $200,000 loan, which costs $1,331 a month at 7% over 30 years. Operating expenses are $789 a month: $250 property tax, $125 insurance and 18% of the $2,300 rent for repairs, vacancy and management. NOI is $1,511 a month, or $18,132 a year, so the cap rate is 7.25%. After the mortgage, cash flow is $180 a month ($2,165 a year). With $57,500 invested, including $7,500 of closing costs, the cash-on-cash return is 3.76%. The DSCR is 1.14, rent is 0.92% of the price, you pay down $2,032 of the loan in year 1, and rent could fall to $2,080 before cash flow turns negative.
Limits and edge cases
- It shows year 1 only, before income tax. Rent growth, rising costs, appreciation and depreciation deductions are left out.
- Big replacements such as a roof or furnace belong in the repairs percentage; many investors use 5% to 10% of rent combined.
- Investment property loans usually cost more than owner-occupied ones, so price your own quote. The mortgage calculator and amortization schedule show the loan in more detail.
Rental property questions
What is a good cash-on-cash return for a rental property?
There is no official benchmark. Many investors aim for 8% or more on a financed rental and accept less in expensive areas where they expect the value to grow. Compare it with what the same cash could earn in a savings account or index fund with no tenants to manage.
What is the 1% rule in real estate?
It is a quick screen that says monthly rent should be at least 1% of the purchase price, so a $250,000 home should rent for $2,500 or more. Few homes in high-cost areas pass it, so treat it as a filter, not a verdict.
What expenses should I include for a rental property?
Include property tax, insurance, HOA dues, utilities you pay, repairs and upkeep, vacancy and property management. Leave out the mortgage, which the calculator subtracts separately, and depreciation, which is a tax deduction rather than cash you spend.
What is the difference between cash flow and cap rate?
Cap rate measures the property's income against its price as if you paid cash, so it compares buildings. Cash flow is what you keep each month after the mortgage, so it depends on your loan. The cap rate calculator values a property from its NOI.
Does this include appreciation or tax benefits?
No. It shows cash flow only. Loan paydown is listed separately, and appreciation and depreciation deductions can add to your total return over time.
Sources: Freddie Mac Primary Mortgage Market Survey (current mortgage rates), IRS Publication 527 (rental expenses and depreciation), OCC Comptroller's Handbook (NOI, cap rate, DSCR). Updated September 2026. This is an estimate, not investment advice.