Rental Property Calculator - Cash Flow & ROI Analysis

Analyze a rental property's cash flow, cash-on-cash return, cap rate, and NOI to see whether the deal actually makes money.

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Results will appear here once you enter your values.

The Rental That Cash-Flows on Paper and Bleeds in Real Life

A new investor finds a $250,000 rental that rents for $2,000 a month. The mortgage, taxes, and insurance come to 1,500. They do the quick math:2,000 minus $1,500 equals $500 a month in profit, $6,000 a year. They wire the deposit. Eighteen months later, the property is losing money.

Here's what the napkin math missed. That $500 was never the real cash flow, because it ignored the costs that don't show up every month but always show up eventually.

  • Vacancy: the unit won't be rented 100 percent of the time. At a typical 5 to 8 percent vacancy rate, that's $100 to $160 a month gone.
  • Repairs and maintenance: budget roughly 1 percent of property value annually, about $2,500 a year, or $208 a month.
  • Capital expenditures: the roof, HVAC, and water heater all die on a schedule. Reserve another $150 to $200 a month so you're not financing a $9,000 roof with a credit card.
  • Property management: even if you self-manage now, budget 8 to 10 percent of rent ($160 to $200) so the deal survives the day you don't want to take the 11 p.m. plumbing call.

Add those up and the real monthly cash flow on this property is closer to negative $200 than positive $500. The deal that looked like $6,000 a year in income is actually costing the investor money every month.

The metrics that tell the truth: serious investors don't look at one number, they look at four. NOI (net operating income) is your annual income minus all operating expenses, before the mortgage. Cap rate is NOI divided by purchase price, useful for comparing properties regardless of financing. Cash flow is what's left each month after the mortgage and every reserve. Cash-on-cash return is your annual cash flow divided by the actual cash you put in, which is the number that tells you whether this beats leaving your money in an index fund.

This calculator runs all four at once and forces you to enter the expenses the napkin math conveniently forgets, so the deal that breaks even and the deal that actually pays you stop looking identical.

How to Run a Rental Deal Like an Investor

Analyze every property the same way, with the same expense categories, so good deals and bad deals can't hide behind incomplete math. Start with gross rent, then subtract every operating cost before you ever touch the mortgage. That gives you net operating income (NOI), the foundation for everything else.

Budget the expenses beginners skip. The mortgage, property taxes, and insurance are easy to remember. The ones that sink deals are vacancy (5 to 8 percent of rent), repairs and maintenance (around 1 percent of property value yearly), capital expenditure reserves for big-ticket replacements ($150 to $200 a month), and property management (8 to 10 percent of rent, even if you self-manage today). A deal that only works if nothing ever breaks and the unit is never empty is not a deal.

Use cap rate to compare, cash-on-cash to decide. Cap rate is NOI divided by purchase price, and it lets you compare two properties without regard to how each is financed. A property in a stable market might run a 5 to 7 percent cap rate; higher cap rates often signal higher risk or weaker neighborhoods. Cash-on-cash return divides your annual pre-tax cash flow by the actual cash invested (down payment plus closing costs plus initial repairs). If your cash-on-cash is 4 percent and a diversified index fund has historically done better with less effort, the rental needs another reason to justify itself, like appreciation or principal paydown.

Pressure-test the rent. Don't use the listing agent's optimistic number. Check what comparable units in the same neighborhood actually rent for, and run the deal at a rent 5 percent below that. If it still cash-flows at the conservative rent, you have margin. If it only works at the best-case rent, you're buying a problem.

Remember what the calculator can't model. Appreciation, tax benefits like depreciation, and your mortgage principal paydown all build wealth beyond monthly cash flow, but they're not guaranteed and shouldn't rescue a property that loses money every month. Cash flow is the floor; everything else is upside.

This calculator provides estimates based on the information you enter. For advice tailored to your situation, consult a qualified financial professional.

Worked example: why the default deal loses money

The calculator finances the purchase with a fixed-rate loan, builds net operating income from rent and expenses, and then subtracts the mortgage to get cash flow. With its default inputs the result is negative, which makes it a useful example of how each line matters.

  • Purchase: $300,000 with 20% down ($60,000) and a $240,000 loan at 7% for 30 years, a monthly payment of $1,596.73 ($19,161 a year).
  • Income: 2,200 rent × 12 =26,400 gross, less 5% vacancy = $25,080 effective gross income.
  • Operating expenses: 3,600 property tax +1,500 insurance + 2,400 maintenance +2,006 management (8% of effective income) + $600 other = $10,106.
  • NOI: $25,080 − $10,106 = $14,974, a cap rate of 4.99%.
  • Cash flow: $14,974 − $19,161 = −$4,187 a year, or about −$349 a month.
  • Cash-on-cash return: −$4,187 ÷ $60,000 = −6.98%.

The core problem is that the property's 4.99% cap rate is below the 7% interest rate, so every borrowed dollar costs more than it earns. That relationship, sometimes called negative leverage, is visible before any of the smaller expenses matter.

Try changing one input at a time to see what it takes to break even. At the same price and loan, rent would need to rise to roughly $2,600 a month. Alternatively, a 40% down payment cuts the annual mortgage cost to about $14,370, which turns cash flow slightly positive, about $600 a year, but ties up $120,000 of cash. A lower purchase price improves both the cap rate and the loan payment at once, which is why price is usually the first thing to negotiate.

What this calculator counts, and what to add yourself

Knowing exactly how the numbers are built helps you avoid a return that looks better than it will be.

  • Cash invested is the down payment only. Cash-on-cash return divides annual cash flow by the down payment. Closing costs (often 2% to 5% of the price for an investment purchase), loan points and initial repairs are not included, so your true cash-on-cash return is lower than shown when you pay those in cash. To approximate it, increase the down payment percentage by the cost of those items.
  • Management is a percentage of collected rent. The fee applies to rent after vacancy, which is how most management contracts work. Leasing fees for placing a new tenant, often half to a full month's rent, are extra; add them to Other Annual Expenses.
  • No separate capital expenditure line. Roof, HVAC, water heater and appliance replacement are not in the defaults. Add a reserve to Maintenance or Other.
  • Property tax and insurance are flat annual figures. Use the tax bill that will apply after the sale, not the seller's current bill, and a landlord policy quote rather than a homeowner policy.
  • No HOA, utilities or rent growth. Owner-paid water, trash or HOA dues belong in Other. All figures are first-year numbers with no inflation or rent increases.
  • Pre-tax and pre-appreciation. Results exclude depreciation, income tax, principal paydown and changes in property value.

A rental that shows positive cash flow only after leaving out these costs is a thinner deal than it appears. Run a conservative version with higher vacancy and a capital reserve, and compare the two before making an offer.

Frequently Asked Questions

Common questions about the Rental Property Calculator - Cash Flow & ROI Analysis

Take monthly rent and subtract every expense: mortgage, property taxes, insurance, vacancy (5 to 8 percent), maintenance (about 1 percent of value yearly), capital expenditure reserves, and property management (8 to 10 percent). A $2,000 rental with a $1,500 mortgage might look like $500 profit, but after these reserves it can land near negative $200. True cash flow counts the costs that don't appear every month but always arrive eventually.

Sources & References

Mortgages and home-buying

Consumer guidance on mortgages, closing costs, and home financing.
→Source: Consumer Financial Protection Bureau (CFPB)

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