Rental Property Calculator
Analyze cash flow, ROI, and Cap Rate for potential real estate investments.
Purchase Info
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Income & Expenses
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Financial Analysis
Est. Monthly Cash Flow
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Monthly Mortgage (P&I)
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Total Monthly Expenses
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Net Operating Income (NOI)
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Cash on Cash ROI
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Cap Rate
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Total Cash Invested (Down Payment)
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Note: "Total Monthly Expenses" includes Mortgage P&I, monthly prorated tax, insurance, and HOA/Misc costs. Maintenance/Vacancy provisions should be added to "Misc Costs" for higher accuracy.
Understanding Rental Property Cash Flow
Evaluating a rental property purchase requires more than just comparing the rent to the mortgage payment. A comprehensive Rental Property Calculator helps investors determine the true profitability of an asset by factoring in all operating expenses, debt service, and initial capital investment.
What is Monthly Cash Flow?
Cash flow is the net amount of money left over each month after all expenses have been paid. It is calculated using the formula:
- Cash Flow = Gross Rental Income – Total Monthly Expenses
Positive cash flow indicates a profitable investment that generates income passively, whereas negative cash flow means the property costs you money to hold every month. To ensure accurate results, investors must include not just the mortgage principal and interest, but also property taxes, homeowner's insurance, HOA fees, and allowances for repairs or vacancies.
Key Metrics: Cap Rate vs. Cash on Cash ROI
Two critical metrics for real estate investors are the Capitalization Rate (Cap Rate) and Cash on Cash Return on Investment (ROI).
- Cap Rate: This measures the property's natural rate of return assuming it was bought with cash. It is calculated as Net Operating Income (NOI) / Purchase Price. It is useful for comparing the quality of the property itself, independent of financing.
- Cash on Cash ROI: This measures the return on the actual cash you invested (down payment + closing costs). It is calculated as Annual Cash Flow / Total Cash Invested. This is often the most important metric for investors using leverage (mortgages).
How to Use This Calculator
1. Enter Purchase Data: Input the target purchase price, your down payment percentage, and the financing terms (interest rate and loan duration).
2. Input Income & Expenses: Enter the expected monthly rent. Be realistic with expense estimates. Property taxes and insurance are usually annual costs, which this tool divides by 12 to determine the monthly impact.
3. Analyze the Result: Look for a positive cash flow and a Cash on Cash ROI that exceeds your investment targets (typically 8-12% for good rentals).