Rental Property Cash Flow & ROI Calculator
Purchase Information
Loan Details
Income
Expenses
Total Cash Needed:
Monthly Mortgage (P&I):
Total Monthly Expenses:
Net Operating Income (Annual):
Monthly Cash Flow:
Cash on Cash Return:
Cap Rate:
What is a Rental Property ROI Calculator?
This calculator is designed to help real estate investors analyze the profitability of a potential rental property purchase. It breaks down the complex mathematics of real estate investing into clear, actionable metrics.
Specifically, this tool focuses on three primary indicators of performance:
- Cash Flow: The net profit you pocket every month after all expenses and mortgage payments are made.
- Cash on Cash Return (CoC): A percentage that measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total property value.
- Cap Rate (Capitalization Rate): A measure of the property's natural rate of return assuming you bought it with all cash. This helps compare properties regardless of financing.
How to Calculate Cash on Cash Return
The Cash on Cash return is often considered the "holy grail" metric for rental investors because it tells you how hard your money is working. The formula used in this calculator is:
Cash on Cash ROI = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Example:
If you invest $50,000 cash (down payment + closing costs) to buy a property, and that property generates $300 in positive cash flow per month ($3,600 per year), your Cash on Cash return is:
($3,600 / $50,000) × 100 = 7.2%
Understanding the Inputs
To get the most accurate result from this calculator, ensure you estimate your expenses conservatively:
- Vacancy Rate: Always budget for vacancy. 5-8% (about 2-3 weeks per year) is standard for most single-family homes.
- Maintenance: Even if a house is new, things break. Budgeting 5-10% of the rent for repairs ensures you aren't caught off guard.
- Management Fees: If you hire a professional property manager, they typically charge 8-10% of the gross monthly rent.
What is a Good ROI?
While "good" is subjective, many investors aim for a Cash on Cash return of 8-12%. However, in high-appreciation markets, investors might accept lower cash flow (4-6%) banking on the property value increasing over time. Conversely, in lower-cost areas with little appreciation, investors often demand higher cash flow (15%+).