What is a good Cap Rate?

Cap Rate depends on location and risk. Lower-risk markets often have 4%–6%, while higher-risk areas may offer 8% or more.

What is cash flow in rental property?

Cash flow is the money left after subtracting all expenses and mortgage payments from rental income.

What is ROI in real estate?

ROI measures total profit including cash flow and property appreciation compared to your investment.

Rental Property Investment Calculator

Calculate rental income, expenses, and long-term returns in seconds. Estimate cash flow, cap rate, and ROI for smarter real estate decisions.

Evaluate cash flow, capitalization rates, and return on investment for any real estate property. Model your mortgage, operating expenses, and future appreciation to make informed buying decisions.

Last updated: March 24, 2026

Purchase Details

Purchase Price ($):

Use a loan?

Yes

Down Payment (%): Interest Rate (%): Loan Term (years):

Closing Cost ($):

Need repairs? (Fixer-upper analysis)

Yes

Repair Cost ($): (Total Rehab Costs) Value After Repairs ($): (ARV)

Recurring Operating Expenses

Property Tax ($): Annual Increase (%):

Insurance ($): Annual Increase (%):

HOA Fee ($): Annual Increase (%):

Maintenance ($): Annual Increase (%):

Other Costs ($): Annual Increase (%):

Income

Monthly Rent ($): Annual Increase (%):

Other Monthly Income ($): Annual Increase (%):

Vacancy Rate (%): (Allowance for Vacancy Loss)

Management Fee (% of rent):

Exit Strategy (Selling)

Do you know the future sell price?

Yes

Sell Price ($): Holding Length (years): Cost to Sell (%):

Value Appreciation (% per year): Holding Length (years): Cost to Sell (%):

Why This Tool Exists

Real estate deals often look profitable on paper until hidden costs eat into your margins. We built this tool to help you quickly break down the numbers, spot potential cash flow issues, and compare different properties accurately without getting tangled up in complicated spreadsheets.

When Should You Use This Tool?

Before making an offer: Run the numbers on a new rental property to ensure the returns align with your investment goals.
Comparing financing options: See how a cash purchase compares against using a mortgage and evaluate the impact of different interest rates.
Analyzing a fixer-upper: Estimate how initial rehab costs and your After Repair Value (ARV) affect your long-term equity.
Long-term planning: Forecast your equity buildup, cumulative cash flow, and property appreciation over a 10 or 20-year horizon.

How the Tool Works

You start by entering the purchase price, your financing details, and your expected rental income. Next, you input your ongoing operating expenses, such as property taxes, insurance, and routine maintenance. The calculator takes these figures, subtracts your costs and mortgage payments from your rental income, and projects your monthly cash flow alongside your total ROI.

Limitations & Accuracy Note

This calculator provides detailed estimates based on your inputs, but it is for informational purposes only. It does not account for complex tax situations, such as depreciation recapture, shifting local tax brackets, or unexpected major repairs that exceed your maintenance budget. Always consult a certified financial planner or tax professional before making significant investment decisions.

Frequently Asked Questions

What is a "good" Capitalization Rate (Cap Rate) for a rental property?

A solid Cap Rate depends heavily on the location and the asset class. Generally, properties in major, highly stable metropolitan areas carry lower Cap Rates (4%–6%) because they are viewed as lower risk. Conversely, higher-risk areas typically offer higher Cap Rates (8%–10%+) to compensate investors for that risk. The best approach is to compare the Cap Rate to similar properties in the exact same neighborhood.

How is the mortgage payment calculated in the cash flow analysis?

The calculator uses the interest rate and loan term you provide to calculate the principal and interest payment using standard amortization. This payment is then deducted from your Net Operating Income (NOI) to find your Net Cash Flow.

What is the Debt Service Coverage Ratio (DSCR) and why is it important?

The DSCR measures a property's ability to cover its annual debt payments. It's calculated by dividing the Net Operating Income (NOI) by the total annual mortgage payments. Lenders typically look for a minimum DSCR of 1.25, meaning the property's income is 125% of its debt obligation.

What is a standard percentage for Vacancy Rate and Management Fees?

A standard vacancy rate used in modeling is between 5% and 10% to account for the time between tenants. Professional property managers typically charge between 8% and 12% of the gross monthly rent collected. You should adjust these inputs based on your local market conditions.

What costs should I include in the Operating Expenses section?

Operating Expenses cover the day-to-day costs of running the rental. You must include fixed costs like property taxes and insurance, along with variable costs like HOA fees, routine maintenance, and an allowance for repairs. Remember to exclude your loan payments and personal income taxes from this specific section, as they are handled separately in the overall return calculation.