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Rental Property Calculator

Check whether a rental property makes money: monthly cash flow, cap rate and cash-on-cash return, after the mortgage and running costs.

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ItemValue
Operating expenses are costs such as property tax, insurance, repairs, management and HOA fees. This leaves out income tax, depreciation and future changes in rent or value. It is an estimate, not investment advice.

Quick Answer

Rental cash flow = rent after vacancy − operating expenses − mortgage payments. A $300,000 rental with 25% down at 7%, renting for $2,500 a month with 5% vacancy and $9,000 of yearly costs, has a mortgage of $1,496.93 and cash flow of about $128 a month. That is a cap rate of 6.50% and a cash-on-cash return of 1.90%.

Last updated: 2 November 2026 ·How we calculate this: net operating income, mortgage payment and cash-on-cash return

Table of Contents

How This Rental Property Calculator Works

Enter the price, your loan details, the rent and the running costs. The calculator works out net operating income, takes off the mortgage, and shows the cash the property puts in your pocket each month and year. It also gives the cap rate and your cash-on-cash return.

Quick explanation: cash flow = NOI − mortgage payments, and cash-on-cash return = yearly cash flow ÷ cash invested.

  • NOI: rent after vacancy minus operating expenses.
  • Cap rate: NOI ÷ price, ignoring the loan.
  • Cash invested: down payment plus closing and repair costs.

How to Use the Rental Property Calculator

  1. Enter the purchase price and your down payment percentage.
  2. Enter the mortgage rate and term.
  3. Enter the expected monthly rent and a vacancy rate.
  4. Enter yearly operating expenses and your closing and repair costs.
  5. Press Calculate to see cash flow, cap rate and cash-on-cash return.

Core Formulas

  • NOI: rent × 12 × (1 − vacancy) − operating expenses
  • Mortgage payment: loan × r ÷ (1 − (1 + r) ^ −n)
  • Cash flow: NOI − mortgage payment × 12
  • Cap rate: NOI ÷ price × 100
  • Cash-on-cash return: yearly cash flow ÷ cash invested × 100

Key Terms

  • Cash flow: money left after all costs and the mortgage.
  • Cash-on-cash return: yearly cash flow as a percentage of the cash you put in.
  • NOI: net operating income, rent after vacancy minus operating costs.
  • Cap rate: NOI as a percentage of the property’s price.

Worked Example

A $220,000 house with 20% down at 6.5% for 30 years. Rent is $2,100 a month, vacancy 5%, costs $7,200 a year, and $5,000 of closing and repairs.

  • Mortgage = $1,112.44 a month
  • NOI = $16,740 a year
  • Cash flow = $3,391 a year, or $283 a month
  • Cash-on-cash return = 6.92% on $49,000 invested

Real-Life Examples

  • Testing a listing: the default example shows $128 a month of cash flow, which tells you whether the rent covers all costs.
  • A bigger down payment: putting 40% down on the same property raises cash flow to about $427 a month, but cash-on-cash return changes to 4.07%.
  • Higher rent: raising rent to $2,700 lifts monthly cash flow to about $318.
  • A lower rate: at 6% instead of 7%, the same deal produces about $276 a month.

Cash Flow vs Appreciation

  • Cash flow: money left each month after all costs. It pays you now.
  • Appreciation: growth in the property’s value. It pays when you sell or refinance.
  • Loan paydown: each payment also reduces the loan, which builds equity.
  • Balance: many investors want positive cash flow so the property pays for itself while it grows.

Costs Investors Often Miss

  • Repairs and capital items: roofs, heating and appliances wear out.
  • Vacancy and turnover: cleaning, advertising and empty months between tenants.
  • Property management: often around 8% to 12% of rent if you hire a manager.
  • Rising costs: property tax and insurance can go up over time.

Common Mistakes to Avoid

  • Leaving out vacancy. Most rentals have some empty months.
  • Underestimating repairs. A common rule is to set aside a share of rent each month.
  • Forgetting management. Even if you manage it yourself, your time has a cost.
  • Using the asking rent. Check what similar homes actually rent for.
  • Ignoring reserves. Keep cash for large repairs and gaps between tenants.

Frequently Asked Questions

Take rent after vacancy, subtract operating expenses and the mortgage payment.

Many investors look for about 8% to 12%, but it depends on the market, risk and your goals.

A quick screen that monthly rent should be at least 1% of the purchase price. It is only a rough first check.

Yes, as an operating expense, even if you self-manage now.

Some investors accept it for expected growth in value, but it adds risk if rents fall or costs rise.

A rough guide that operating costs, not counting the mortgage, often take about half of rent.

Many investors set aside 5% to 10% of rent for repairs and another amount for big items like roofs and heating systems. Older homes need more.

High prices, high mortgage rates and big expenses all squeeze cash flow. Try a lower price, more rent or lower costs to see what changes the result.

Cash gives higher monthly cash flow, while a mortgage lets you buy with less money down and can raise your return if the property performs well. It also adds risk.

No. Income tax and depreciation depend on your situation, so check with a tax professional.

References & Sources

SourceUsed ForLink
Investopedia, Cash-on-cash return Definition and formula. https://www.investopedia.com/terms/c/cashoncashreturn.asp
IRS, Topic no. 414, Rental income and expenses How rental income is taxed. https://www.irs.gov/taxtopics/tc414