Rental Property Calculator
Property & financing
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Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States — state and local practice
- Scope and limitations
- Educational estimate only. U.S. real estate costs are local: property tax rates, transfer and recording taxes, title practice, who customarily pays which closing cost, and landlord-tenant rules all change by state and often by county or city. Agent commission is negotiable and, since the 2024 NAR settlement, buyer-agent compensation is negotiated separately rather than assumed. Only a lender's Loan Estimate, a title company's fee sheet or a signed contract binds a number.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the purchase price, the monthly rent and your down payment.
- 02
Set the mortgage rate and term. Rental loans usually price above owner-occupied ones.
- 03
Open Advanced options and enter the property tax, insurance and any HOA — these are the fixed costs a seller's pro forma routinely leaves out.
- 04
Set the allowances: vacancy, maintenance, capital reserve and management. They are percentages of rent, and leaving them at zero is how a losing deal looks profitable.
- 05
Read the cash flow, then the operating statement below it. Cap rate, cash-on-cash and DSCR each answer a different question about the same property.
Formula
Gross scheduled rent is the monthly rent times twelve. Vacancy loss is a percentage of it, and effective gross income is scheduled rent minus vacancy plus other income. Operating expenses are property tax, insurance and HOA, plus maintenance and capital reserve as percentages of scheduled rent, plus management as a percentage of effective gross income — maintenance and reserves are budgeted off what the unit should earn, while a manager bills a share of what is actually collected. NOI is effective gross income minus operating expenses. The mortgage payment is the standard amortising payment on the price less the down payment, and cash flow is NOI minus twelve of those payments. Cap rate is NOI over price; cash-on-cash is cash flow over the down payment plus closing costs plus rehab; DSCR is NOI over annual debt service. Each of those three renders as a dash rather than a number when its denominator is zero — an all-cash purchase has no debt service to cover, and a deal with no cash in it has an undefined return rather than an infinite one.
Example
A $265,000 property renting for $2,400 a month, 25% down at 7% over 30 years, with $3,180 of property tax, $1,600 of insurance, and the standard allowances. Gross scheduled rent: $2,400 x 12 = $28,800. Vacancy at 5%: −$1,440. Effective gross income: $27,360. Operating expenses: $3,180 tax + $1,600 insurance + $2,304 maintenance + $1,440 reserve + $2,189 management = $10,713. NOI: $27,360 − $10,713 = $16,647. Loan: $198,750 at 7% over 30 years = $1,322 a month, or $15,867 a year. Cash flow: $16,647 − $15,867 = $780 a year, or $65 a month. Cap rate 6.3%. DSCR 1.05. Cash-on-cash 0.9% on $86,200 of cash invested. This is what a marginal deal looks like, and it is worth sitting with. It cash flows — but $65 a month is one repair from negative, and a DSCR of 1.05 is below what most rental lenders will write. Take out the allowances and the same property shows $650 a month of cash flow and a 9% cash-on-cash return. Nothing about the building changed; only the honesty of the spreadsheet did.
Definitions
- Gross scheduled rent
- Annual rent if the unit were occupied every month at the asking rent. The top line, before anything is deducted.
- Effective gross income
- Scheduled rent less vacancy, plus other income. What the property actually collects.
- Operating expenses
- Everything except the mortgage: tax, insurance, HOA, maintenance, reserves and management.
- Net operating income (NOI)
- Effective gross income minus operating expenses. Deliberately excludes financing so properties can be compared.
- Debt service
- The annual mortgage payment, principal and interest. Subtracted after NOI.
- Cash flow
- NOI minus debt service. The money that actually reaches your account.
- Cap rate
- NOI divided by price. Compares properties without regard to how they are financed.
- Cash-on-cash return
- Annual cash flow divided by the cash invested. Compares deals, including the effect of the loan.
- DSCR
- NOI divided by annual debt service. The test a rental lender applies to the property rather than to you.
- Vacancy allowance
- A percentage of rent set aside for empty months and turnovers, typically 5% to 8%.
- Capital reserve
- A monthly set-aside for large replacements — roof, furnace, water heater — that fail on a schedule.
- Pro forma
- A seller's projection of income and expenses. A marketing document, not an operating statement.
Good to know
The four allowances that decide whether a rental works
Vacancy, maintenance, capital expenditure and management are the lines that separate a spreadsheet from a business, and they are the lines beginners leave out. At the defaults here they consume $7,373 a year — 25.6% of gross rent — and they are the difference between $65 a month of cash flow and a number that looks like $680. Vacancy at 5% assumes about eighteen days empty a year, which is optimistic in a market with normal turnover. Maintenance at 8% covers the repairs that arrive on their own schedule. Capital expenditure at 5% is the sinking fund for the roof, the HVAC and the water heater — money you are not spending this year and will certainly spend. Management at 8% is real whether you hire it out or do it yourself, because your time is not free and the day you stop wanting to take the calls, the expense appears.
Cash flow of $65 a month is not a margin
The headline result here is positive, and it is far too thin to be comfortable. Sixty-five dollars a month is $780 a year against a property that will eventually need a $9,000 roof. One extra month of vacancy wipes out more than two years of it. A single insurance renewal at the increases US landlords have seen recently can erase it entirely. The useful test is not whether cash flow is positive but how much has to go wrong before it is not — and here the answer is very little. Investors who buy at this margin are usually buying for appreciation and telling themselves they bought for cash flow. That can work, but it should be a decision rather than an accident, because appreciation does not pay a mortgage in a month the tenant leaves.
Cap rate and cash-on-cash answer different questions
The cap rate here is 6.3% and the cash-on-cash return is 0.9%, and neither is wrong. Cap rate divides net operating income by price and deliberately ignores financing — it measures the property, so two investors paying the same price get the same cap rate regardless of how they funded it. Cash-on-cash divides the after-debt cash flow by the cash you actually put in, so it measures your deal. When the mortgage rate is above the cap rate, leverage is working against you and cash-on-cash falls below it, which is exactly what a 7% loan against a 6.3% cap rate produces. That is negative leverage, and it was rare for a decade and is common now. It is not automatically disqualifying — principal paydown and appreciation still accrue — but it means the loan is costing more than the asset earns, and the deal is relying on something other than income.
What a DSCR of 1.05 means to a lender
Debt service coverage is net operating income divided by annual debt service, and 1.05 means the property covers its loan payments with 5% to spare. Rental lenders typically want 1.20 to 1.25, and many DSCR loan programs will not write below 1.00 at all. So this property, as configured, is at or below the threshold for the loan product most investors would use to buy it — which usually means a larger down payment, a lower price, or higher rent than the analysis assumes. The number is worth taking seriously even in a conventional purchase, because it is the lender's summary of the same fragility the thin cash flow shows. A property that a specialist lender will not finance on its income is a property whose income does not support it.
The returns this page does not count
Cash flow is one of four ways a rental pays, and it is the smallest one in most deals. Principal paydown adds equity every month from the tenant's rent. Appreciation compounds on the whole property value rather than on your down payment, which is where leverage earns its reputation. And depreciation shelters a portion of the income from tax — the Rental Property Depreciation Calculator prices that, and the shelter is often worth more than the cash flow on a property like this one. The reason to insist on cash flow anyway is survival: appreciation and paydown are only available to an owner who still owns the property, and the thing that forces a sale is running out of money in a bad year. Cash flow is what buys the time for the other three to work.
Frequently asked questions
What counts as good cash flow?
Investors commonly look for $100 to $200 a month per unit after every expense, including reserves. The figure matters less than what is behind it: $200 a month with no maintenance budget is worse than $65 a month with a full one, because the roof arrives either way.
Why budget for vacancy when the place is rented?
Because tenants leave. A turnover costs the empty weeks plus cleaning, painting and listing, and averaged over years that is 5% to 8% of rent in most markets. Budgeting it monthly is the difference between an expected cost and a crisis.
What is a capital reserve for?
The things that fail on a schedule rather than randomly: a roof every 20 to 30 years, a furnace every 15 to 25, a water heater every 10 to 15. Maintenance covers the leaking faucet; the reserve covers the $12,000 roof. Skipping it does not save money, it defers it.
Do I need to budget management if I self-manage?
Yes, and here is why: if the property only works because you do the work for free, it is a job rather than an investment. Budgeting 8% to 10% tells you whether the numbers survive handing it over — which you eventually will.
Why is maintenance charged on scheduled rent but management on collected rent?
Because that is how each behaves. A manager bills a percentage of what they collect, so a vacant month costs them too. Maintenance does not stop when the unit is empty — arguably it rises, since turnovers are when repairs happen.
What is NOI and why does it exclude the mortgage?
Net operating income is what the property earns before financing. It is deliberately debt-free so that two buyers with different loans can compare the same building. It is also what a lender and an appraiser use to value it.
What DSCR do lenders want?
Most rental lenders want 1.20 to 1.25 — the rent must cover the full payment with a margin. Below 1.0 the property does not cover its own debt. Some lenders will go to 1.0 or use a debt-service-coverage exception at a higher rate.
Is a 6% cap rate good?
It depends entirely on the market. Six percent is unremarkable in the Midwest and excellent in coastal California, where 3% to 4% is common because buyers are paying for appreciation rather than yield. Compare cap rates within a market, never across them.
Why is my cash-on-cash so much lower than the cap rate?
Because the mortgage eats the difference. Cap rate ignores financing; cash-on-cash divides year-one cash flow by the cash you actually put in. When the loan rate is above the cap rate, leverage reduces your return rather than amplifying it — which is exactly what a 7% loan against a 6.3% cap rate does.
What does this leave out?
Appreciation, principal paydown and the depreciation deduction — three of the four ways a rental pays you. This is the year-one cash picture only. The Rental Property Total Return Calculator adds the others.
Should I include closing costs and rehab?
Yes, under Advanced options. They do not affect cash flow, but they are part of the cash you put in, so they change cash-on-cash substantially. A deal that looks good on the down payment alone often does not once $20,000 of closing and rehab is counted.
The seller's numbers look much better than this. Why?
A pro forma is a marketing document. The common omissions are vacancy, management, capital reserves and the real property tax after reassessment at your purchase price. Rebuild it from your own figures and the gap is usually most of the cash flow.