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Rental Property Calculator
Cash flow, cap rate, cash-on-cash return, NOI and DSCR for any rental, in seconds.
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How to analyze a rental property
A rental is a good deal when the rent covers every expense and the mortgage with room to spare, and when the return on the cash you put in beats your other options. This calculator runs the four numbers investors and lenders look at first.
Net operating income (NOI)
NOI is the rent you actually collect after vacancy, minus operating expenses: property tax, insurance, HOA, maintenance, capital expense reserves, management and any utilities you pay. It does not include the mortgage.
Cap rate
The capitalization rate compares NOI to the price. It lets you compare properties regardless of how they are financed.
Cash-on-cash return
Cash-on-cash is the yearly cash flow after the mortgage divided by the cash you put in: down payment, closing costs and repairs.
DSCR
The debt service coverage ratio is NOI divided by the mortgage payment. Many lenders want 1.25 or more on investment property, which means the rent covers the loan with a 25% cushion.
Rules of thumb, and their limits
The 1% rule says monthly rent should be at least 1% of the price. It is a quick screen, not a verdict: in many markets good long-term rentals rent for less. Break-even occupancy shows how full the property must be to cover expenses and the loan. Under about 85% leaves room for surprises.
The full Rental Property ROI Calculator adds pro forma vs. actual, up to 14 units, property tax and insurance rates by state and county, a 5-year return and tax deduction summary and a loan qualification check.
Read the guide: The 1%, 50% and 70% rules, tested on a real deal
Questions
What is a good cap rate for a rental property?
It depends on the market and the property type. Many single-family and small multifamily rentals trade between about 5% and 8%. A higher cap rate usually means more income per dollar but often more risk or more work.
Should the cap rate include my mortgage?
No. The cap rate uses NOI, which excludes the mortgage, so you can compare properties no matter how they are financed. Cash-on-cash return is the number that includes your financing.
How much should I budget for maintenance and CapEx?
A common starting point is 5% to 10% of rent for maintenance and another 5% to 10% for capital expenses like roofs, HVAC and water heaters. Older homes need more.
Is this financial advice?
No. The calculator is an educational tool that runs the math on the numbers you enter. Verify taxes, insurance and loan terms with your own sources before you buy.