Rental Property Calculator
A rental property calculator combines rent, vacancy, operating expenses, financing, and cash invested to estimate monthly cash flow and common property return metrics. It is a screening tool, not a valuation, tax, or investment recommendation.
Quick answer
Positive cash flow means projected rent exceeds operating costs and debt service under the entered assumptions. Cap rate excludes financing, while cash-on-cash return includes debt service and compares cash flow with cash invested.
Calculator
How to use this calculator
- Enter price, down payment, and initial cash costs.
- Enter expected rent and vacancy.
- Add recurring operating expenses.
- Enter financing assumptions.
- Review cash flow and stress-test lower rent or higher repairs.
Explanation
What it is
A rental property calculator combines rent, vacancy, operating expenses, financing, and cash invested to estimate monthly cash flow and common property return metrics. It is a screening tool, not a valuation, tax, or investment recommendation.
How it works
The calculator reduces scheduled rent by vacancy, subtracts operating expenses to estimate NOI, then subtracts mortgage payments for cash flow. Cap rate divides annual NOI by price; cash-on-cash divides annual cash flow by initial cash invested.
When to use it
Use the rental property calculator when comparing options, setting a realistic target, or checking whether a proposed financial decision fits your broader plan.
Limitations
- The result is an estimate based on the amounts, rates, timing, and assumptions entered.
- Actual product terms, taxes, fees, eligibility rules, and market conditions can change the outcome.
- Use official disclosures or a qualified professional before making a binding financial decision.
Key terms
- Net operating income
- Property income after vacancy and operating expenses, before debt service and income taxes.
- Cap rate
- Annual NOI divided by property value or price.
- Cash-on-cash return
- Annual pre-tax cash flow divided by initial cash invested.
- Vacancy allowance
- Expected lost rent from vacancy or nonpayment.
Formula
The calculator reduces scheduled rent by vacancy, subtracts operating expenses to estimate NOI, then subtracts mortgage payments for cash flow. Cap rate divides annual NOI by price; cash-on-cash divides annual cash flow by initial cash invested.
Worked example
A $350,000 rental earning $3,000 monthly with 5% vacancy and $900 monthly operating costs can have positive or negative cash flow depending heavily on financing rate and down payment.
FAQ
What is a good cash flow on a rental property?
There is no universal amount. Consider risk, reserves, local conditions, financing, management time, taxes, and alternative uses of capital.
Does cap rate include the mortgage?
No. Cap rate is an unlevered property metric based on NOI before debt service.
What expenses should I include?
Consider property taxes, insurance, repairs, capital reserves, management, utilities paid by the owner, dues, licensing, landscaping, and turnover.
How much vacancy should I assume?
Use local historical evidence and a conservative allowance. Seasonal, student, short-term, and single-tenant properties can have different risk.
Does this calculate depreciation or income tax?
No. Tax treatment can be material and depends on basis, personal use, passive-activity rules, and individual circumstances.
Common mistakes
- Using an advertised rate without checking whether it applies to the full balance or term.
- Leaving out fees, taxes, timing differences, or irregular cash flows.
- Treating a planning estimate as a guaranteed quote or final professional calculation.
Tips
- Run a conservative scenario as well as an optimistic one.
- Change one assumption at a time so you can see what drives the result.
- Save or export the calculation and update it when rates, costs, or goals change.
Sources and editorial review
Educational estimates only; not personalized financial, tax, legal, lending, investment, or insurance advice.