Rental Property Calculator

Analyze potential rental investments with cash flow, cap rate, and ROI calculations

Monthly Cash Flow
+$161
$1,937/year profit
Cap Rate 6.63% NOI / Purchase Price
Cash-on-Cash 2.31% Cash Flow / Cash Invested
Total ROI 13.02% Including appreciation
Monthly Rent (after vacancy) $2,375
Monthly Expenses $2,214
Mortgage Payment $1,497
Cash Invested $84,000
Break-even Occupancy 88.5%
Net Operating Income $19,900/year

Monthly Expense Breakdown

1% Rule: FAIL

Rent ($2,500) should be at least 1% of purchase price ($3,000). Consider negotiating price or finding higher rent potential.

Rental Property Investment Metrics

Understanding key real estate metrics helps you evaluate potential rental property investments objectively.

Key Metrics Explained

Each metric tells a different part of the investment story.

  • Cap Rate: Annual NOI / Purchase Price. Good for comparing properties.
  • Cash-on-Cash: Annual cash flow / cash invested. Your actual ROI.
  • NOI: Net Operating Income = Rent - Operating Expenses (no mortgage).
  • Total ROI: Cash flow + appreciation + equity buildup.

Quick Screening Rules

These rules of thumb help quickly filter properties worth analyzing further.

  • 1% Rule: Monthly rent should be 1%+ of purchase price.
  • 50% Rule: Operating expenses typically equal 50% of rent.
  • 70% Rule (flips): Max price = 70% of ARV minus repairs.
  • 2% Rule (rare): For strong cash flow markets only.

Hidden Costs to Consider

Don't forget these often-overlooked expenses that can eat into returns.

  • CapEx reserves: Budget 5-10% for roof, HVAC, appliances.
  • Turnover costs: Cleaning, repairs, vacancy between tenants.
  • Legal/eviction: Budget for occasional problem tenants.
  • Property management: 8-12% if not self-managing.