Rental Property Calculator

How to analyze a rental property

Rental property analysis comes down to one question: after every expense is paid, does the property put money in your pocket every month, and is the return worth the cash you had to put in to get there? That means tracking two separate things — monthly cash flow (the dollar amount left over) and Cash-on-Cash ROI (that cash flow measured against what you actually invested).

How this calculator works

Start with purchase price, down payment, interest rate, and loan term to get the monthly mortgage payment. Add ongoing costs — property taxes, insurance, HOA, vacancy, property management, repairs and maintenance, and CapEx reserves — to get total monthly expenses. Subtracting that from monthly rent gives you cash flow. From there:

• Cash-on-Cash ROI = (Annual Cash Flow ÷ Initial Cash Invested) × 100 — your down payment plus any repair costs paid out of pocket. Use the dedicated Cash-on-Cash Return Calculator if you just want this number quickly.
• Cap Rate = (Net Operating Income ÷ Purchase Price) × 100 — the property's return independent of financing. See the Cap Rate Calculator for a standalone version.
• NOI = Annual Rent − Annual Operating Expenses, excluding the mortgage payment.

Worked example

A $200,000 rental with 20% down ($40,000), a 6.5% 30-year loan, and $2,000/month rent. That works out to roughly a $1,011 mortgage payment, $200 in taxes, $100 in insurance, and about $460 combined for vacancy, management, repairs, and CapEx reserves at typical default rates — total monthly expenses around $1,771. That leaves about $229/month, or $2,744/year, in cash flow. Against the $40,000 down payment, that's a Cash-on-Cash ROI of roughly 6.9%. Annual rent of $24,000 minus about $9,120 in operating expenses (excluding the mortgage) gives an NOI of about $14,880 — a 7.4% Cap Rate on the $200,000 purchase price.

How to interpret the results

There's no single "good" number — it depends on your market and strategy — but as a rough starting point, many buy-and-hold investors look for double-digit Cash-on-Cash ROI and a Cap Rate that beats what the same cash could earn elsewhere with comparable risk. A property with strong Cap Rate but weak Cash-on-Cash usually means the financing terms (or down payment size) are working against you, not the property itself — worth re-running the numbers with a different loan structure before passing on the deal.

Common rental analysis mistakes

• Forgetting vacancy — even a great tenant means turnover eventually. Budgeting 0% vacancy overstates cash flow.
• Skipping CapEx reserves — roofs, HVAC, and water heaters don't fail on a convenient schedule; budget for them monthly rather than being surprised.
• Using list-price rent instead of realistic, verified market rent for the specific unit and condition.
• Ignoring property management costs even when self-managing — your time has a cost, and it lets you compare deals apples-to-apples with ones you wouldn't self-manage.

FAQ

What's a good Cash-on-Cash ROI for a rental?
It varies by market and risk tolerance, but many investors target 8-12%+ as a starting screen, adjusting for local norms and how much appreciation or tax benefit they expect on top of cash flow.

Does this calculator include tax benefits like depreciation?
No — it models pre-tax cash flow only. Depreciation and other tax effects are real but highly dependent on your individual tax situation, so they're left out of these figures deliberately.

Can I use this for a property I already own?
Yes — enter your actual numbers (current loan balance and payment terms as the "purchase" figures) to see current performance the same way you'd screen a new purchase.