Real estate investment calculator
Estimate whether a rental property may produce positive cash flow, a reasonable cap rate, enough debt coverage, and a long-term return after financing, expenses, vacancy, appreciation, and sale costs.
Estimated annual cash-on-cash return
Inputs
Use conservative estimates. Rental property results are sensitive to vacancy, repairs, financing, and selling costs.
Your rental property estimate will appear here.
NOI = collected income - operating expenses. Cap rate = NOI / purchase price. Cash-on-cash = annual cash flow / initial cash invested.
Method
The calculator separates operating performance from financing. NOI and cap rate show the property before debt service, while cash flow, cash-on-cash return, DSCR, and IRR show the investor's leveraged result.
Decision context
Many weak rental deals look attractive when only rent and mortgage are compared. Real ownership usually includes vacancy, repairs, insurance, taxes, management time, capital improvements, turnover, and selling costs.
A property can have a positive cap rate but poor cash flow if financing is expensive. It can also have low first-year cash flow but strong long-term returns if rents grow, debt is paid down, and the property appreciates.
Key metrics
No single metric tells the full story. A practical rental analysis checks operating income, leverage, cash requirements, and exit assumptions together.
Shows property-level income before financing. It helps compare properties even when buyers use different loans.
NOI divided by purchase price. Useful for market comparison, but it does not include loan terms or appreciation.
Annual cash flow divided by initial cash invested. It shows how financing changes the investor's cash yield.
Risk check
Vacancy, maintenance, rent growth, and exit price often decide whether a rental property works. Small changes compound over a long holding period, so stress-testing assumptions is often more useful than chasing a single optimistic return.
For older properties, maintenance and capital reserves may need to be materially higher than a simple percentage rule. For short-term rentals or high-turnover markets, vacancy and management assumptions may need extra caution.
Practical examples
Use the holding period, rent growth, expense growth, and appreciation fields to test whether slow compounding offsets modest first-year cash flow.
Include repair costs in initial cash needed, then compare the projected post-repair income and appreciation assumptions with the added risk.
Change interest rate, down payment, and loan term to see whether the property works only under optimistic financing.
Related tools
Use these tools to check financing, debt service, and competing investment assumptions.
FAQ
There is no universal good cap rate. It depends on market risk, property condition, financing environment, rent growth, local demand, and the investor's strategy.
Cap rate ignores financing. Cash-on-cash return includes debt service and compares annual cash flow with the cash you invested.
No. It estimates pre-tax cash flow and return. Depreciation, passive activity rules, capital gains, depreciation recapture, and local taxes require separate tax analysis.
Repairs are included as initial cash invested in this calculator. If repairs also increase market value, reflect that through appreciation or an optional known sale price.
No. Appreciation and sale price are assumptions. Real property values can change because of rates, local jobs, supply, regulations, and property condition.
This calculator is for general informational purposes and simple arithmetic checks. It is not investment, tax, legal, lending, or real estate advice. Verify rent comps, costs, financing, taxes, insurance, local laws, and deal assumptions with qualified professionals before buying or selling rental property.