Property Details
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Financial Analysis
Monthly Cash Flow
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Cash on Cash Return
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Cap Rate
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Net Operating Income (Annual)
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Total Cash Invested
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Monthly Mortgage (P&I)
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Total Monthly Expenses
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Understanding Your Rental Property Analysis
Investing in real estate is one of the most reliable ways to build wealth, but it requires careful financial planning. This Rental Property Cash Flow Calculator helps you determine if a potential investment property will generate positive income or become a financial burden.
Key Metrics Explained
Monthly Cash Flow
This is your net profit each month after all expenses (mortgage, taxes, insurance, HOA, repairs) are paid. A positive cash flow means the property pays for itself and puts money in your pocket.
This is your net profit each month after all expenses (mortgage, taxes, insurance, HOA, repairs) are paid. A positive cash flow means the property pays for itself and puts money in your pocket.
Cash on Cash (CoC) Return
This metric calculates the annual return on the actual cash you invested (Down Payment + Closing Costs). It is calculated as: (Annual Cash Flow / Total Cash Invested) × 100. A good CoC return is typically considered to be above 8-12%, depending on the market.
This metric calculates the annual return on the actual cash you invested (Down Payment + Closing Costs). It is calculated as: (Annual Cash Flow / Total Cash Invested) × 100. A good CoC return is typically considered to be above 8-12%, depending on the market.
Cap Rate (Capitalization Rate)
Cap Rate measures the property's natural rate of return assuming you paid all cash. It helps compare different properties regardless of financing. Formula: (Net Operating Income / Purchase Price) × 100.
Cap Rate measures the property's natural rate of return assuming you paid all cash. It helps compare different properties regardless of financing. Formula: (Net Operating Income / Purchase Price) × 100.
How to Improve Your ROI
If your calculation shows negative cash flow or low returns, consider the following strategies:
- Negotiate the Purchase Price: A lower price reduces your loan amount and mortgage payments, instantly boosting cash flow.
- Increase Down Payment: While this uses more cash upfront, it lowers your monthly debt service, increasing monthly cash flow.
- Value-Add Improvements: Renovating the property to justify higher rent can significantly increase your Net Operating Income.
- Shop for Insurance: Insurance premiums vary wildly. Getting multiple quotes can lower your monthly expenses.
Why Net Operating Income (NOI) Matters
NOI is a critical figure because lenders use it to determine the property's profitability. It represents the income left over after operating expenses but before the mortgage is paid. A healthy NOI provides a buffer against vacancies and unexpected repairs.