Rental Property Cash Flow & ROI Calculator
Analyze your potential real estate investment deals instantly.
Analysis Results
Total Initial Investment: $0
Monthly Mortgage Payment (P&I): $0
Total Monthly Expenses: $0
Net Operating Income (Annual): $0
How to Calculate Rental Property ROI
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee profit. To ensure a deal makes sense, investors use specific metrics like Cash Flow, Cash on Cash Return (CoC), and Cap Rate. This calculator helps you evaluate these numbers accurately.
Understanding the Key Metrics
1. Monthly Cash Flow
This is the profit you take home every month after all expenses are paid. It is calculated as:
Gross Rent – (Mortgage + Taxes + Insurance + HOA + Maintenance + Vacancy Reserves)
Positive cash flow ensures the property pays for itself and provides passive income. A common goal for beginners is $100-$200 per door in net positive cash flow.
2. Cash on Cash Return (CoC)
This metric measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total loan amount. It allows you to compare real estate returns against other investments like stocks.
Formula: (Annual Cash Flow / Total Cash Invested) × 100
A good Cash on Cash return depends on the market, but many investors look for 8-12% or higher.
3. Capitalization Rate (Cap Rate)
The Cap Rate measures a property's natural rate of return assuming you bought it in cash (no loan). It is useful for comparing the profitability of similar properties regardless of financing.
Formula: (Net Operating Income / Purchase Price) × 100
Why Factor in Vacancy and Maintenance?
Novice investors often make the mistake of assuming a property will be rented 100% of the time and nothing will break. Our calculator includes fields for:
- Vacancy Rate: Typically 5-8% to account for turnover periods between tenants.
- Maintenance: Typically 5-10% of rent should be set aside for repairs and capital expenditures (like a new roof or water heater).
Using conservative estimates for these expenses prevents negative surprises and keeps your investment portfolio healthy.