Rental Property Calculator
The full deal analysis in one pass: enter the purchase, financing, rent, vacancy, and operating expenses, and get the three numbers the model reports — monthly cash flow, cash-on-cash return, and cap rate.
Deal analysis
Example: $220,000 at 20% down, $2,200 rent → $269.07/mo, 6.21% cash-on-cash.
The worked example, line by line
A $220,000 property with 20% down ($44,000) leaves a $176,000 loan at 7% over 30 years — $1,170.93 a month. Rent of $2,200 less a 5% vacancy allowance gives $2,090.00 of expected income; subtract $650 of operating expenses and the mortgage, and the deal clears $269.07 a month ($3,229 a year). Against $52,000 actually invested (down payment + closing + rehab), that is a 6.21% cash-on-cash return, and the property's $17,280 net operating income prices it at a 7.85% cap rate. Every figure is computed by the same tested engine as the calculator above. The inputs are illustrative values entered for the example, not a statement about any price, rate, or rent.
Read the guide: Cash flow and cash-on-cash return walks through the payment formula, the cash-invested denominator, and why financing moves one ratio but not the other. More background on every tool lives in the guides.
The formula chain, input by input
The calculator runs one fixed sequence, and each input enters at a specific step. Purchase price minus down payment is the loan. The loan, the annual interest rate, and the term feed the standard amortized-payment (PMT) formula with monthly compounding; when the rate is 0%, the engine divides the principal evenly across the months instead. Monthly rent times (1 − vacancy%) is effective rent — vacancy is a steady haircut, not a count of empty months. Effective rent minus operating expenses, times 12, is net operating income, and NOI divided by the purchase price is the cap rate. Effective rent minus operating expenses minus the mortgage payment is monthly cash flow; times 12 it is annual cash flow. Down payment plus closing costs plus initial rehab is cash invested, and annual cash flow divided by cash invested is the cash-on-cash return.
Two consequences follow from the order. Cap rate is finished before the mortgage is ever computed, so nothing about the loan can change it. Cash-on-cash is the last number out, and both halves of its ratio depend on financing: the payment sits inside the numerator and the down payment inside the denominator. The 0% branch is easy to see. Hold the worked example and enter 0% as the rate: the $176,000 loan becomes $488.89 a month — the principal spread over 360 payments with no interest — lifting monthly cash flow to $951.11 and cash-on-cash to 21.95%, while the cap rate stays at 7.85%.
Why three numbers, not one
Each metric answers a different question. Cash flow asks whether the property covers its own operating expenses and mortgage payment each month, and by how much. Cash-on-cash asks what the cash that actually left your pocket earns from that cash flow in a year. Cap rate asks what the property itself yields on its price with financing removed — the one figure that stays comparable across buyers with different loans, or no loan at all. The quick screen that comes before any of this is the 1% Rule Calculator; the convention it applies is a screen, not a verdict, and so are the three numbers here.
The clearest way to see the split is to change nothing but the financing. Pay the full $220,000 in cash — enter a down payment equal to the price — and the mortgage payment is $0.00, so monthly cash flow rises to $1,440.00, which is simply NOI divided by twelve. Cash invested is now $228,000 including the same closing and rehab lines, and cash-on-cash is 7.58%. The cap rate is 7.85% — identical to the financed case, because nothing in its formula moved. Note that even with no loan, cash-on-cash and cap rate are not the same number: the closing and rehab costs sit in the cash-invested denominator but not in the purchase price.
Now go the other way and put 10% down ($22,000) on the same property. The loan grows to $198,000 and the payment to $1,317.30, so monthly cash flow drops to $122.70. Cash invested falls to $30,000, and cash-on-cash lands at 4.91% — lower than the 20%-down figure in this example, because the larger payment removed more from the numerator than the smaller down payment removed from the denominator. With other inputs the comparison can go the other way; the model reports the arithmetic for the inputs you enter and nothing more. The cap rate, once again, is 7.85%.
Vacancy is a haircut on rent, not a count of empty months
The vacancy allowance is applied as a percentage of scheduled rent every month, which is why it reaches every downstream figure at once. Leave it at 0% on the worked example and effective rent equals the full $2,200: cash flow is $379.07 a month, cash-on-cash 8.75%, cap rate 8.45%. Raise it to 10% and effective rent falls to $1,980.00: cash flow $159.07, cash-on-cash 3.67%, cap rate 7.25%. The mortgage payment is unchanged at $1,170.93 in both cases, so every dollar of rent the allowance removes comes straight out of cash flow. The model does not know how often a given property sits empty; the allowance is an input you choose, and a blank field is treated as 0%.
Three more properties, read the same way
A $150,000 property with $37,500 down, financed at 6.5% over 20 years, renting for $1,500 with an 8% vacancy allowance, $520 of monthly operating expenses, $4,000 of closing costs, and a $12,000 initial rehab: the payment is $838.77, effective rent $1,380.00, and monthly cash flow $21.23 — a thin positive margin. NOI is $10,320 for a 6.88% cap rate, and $255 of annual cash flow on $53,500 invested is a 0.48% cash-on-cash return. The large rehab line is what pushes cash invested well above the down payment, and it lowers cash-on-cash without touching cap rate or cash flow.
A larger building — $600,000 with $150,000 down at 6.75% over 30 years, $5,400 of combined rent, 6% vacancy, $1,900 of monthly operating expenses, $9,000 closing and $20,000 rehab — carries a $2,918.69 payment against $5,076.00 of effective rent. Cash flow is $257.31 a month, NOI $38,112, cap rate 6.35%, and cash-on-cash 1.72% on $179,000. The dollar figures are far larger than the first example's; the percentages are what make the two comparable, and even then only on the slice of return this model measures.
Finally, a case that goes negative: $300,000 with $60,000 down at 7.5% over 30 years, $2,100 rent, 5% vacancy, and $800 of operating expenses, with closing and rehab left blank. Effective rent less expenses leaves $1,195.00 a month, but the payment is $1,678.11, so cash flow is -$483.11 a month and cash-on-cash is -9.66% on $60,000 invested. The cap rate is still a positive 4.78%, because NOI is positive and the loan never enters that formula. A negative cash flow is a legitimate output, not an error: it means the financing as entered costs more each month than the property nets before the mortgage.
Common misreadings
Operating expenses must exclude the mortgage. The expense field is for property tax, insurance, maintenance, management, HOA dues, utilities you pay, and reserves — not principal and interest. The calculator computes the payment from the loan inputs and subtracts it on the cash-flow line, so a payment folded into expenses is counted twice. Enter $1,820.93 of expenses on the worked example — the $650 of true operating costs plus the $1,170.93 payment — and monthly cash flow reads -$901.86 instead of $269.07, while the cap rate collapses from 7.85% to 1.47% even though the property and its price are unchanged.
Cap rate is financing-independent; cash-on-cash is not. Two buyers looking at the same property with the same rent and expenses see the same cap rate and different cash-on-cash returns whenever their down payments, rates, or terms differ. Comparing one buyer's cash-on-cash to another's cap rate is comparing two different ratios.
Cash invested is the cash that leaves your pocket, not the price. The denominator of cash-on-cash is down payment plus closing costs plus initial rehab; the loan is not your cash and is not in it. Leaving closing costs and rehab blank when you expect to pay them overstates cash-on-cash by shrinking the denominator.
The ratios use annual figures. The result box reports monthly cash flow, annual cash flow, the mortgage payment, cash invested, cash-on-cash, and cap rate. Cash-on-cash divides the annual cash flow by cash invested, and cap rate divides annual NOI by the price — a monthly figure dropped into either ratio by hand would be twelve times too small.
Rates are entered as percentages, not decimals. Enter 7 for 7% and 5 for a 5% vacancy allowance, as the placeholders show. Rent and operating expenses are monthly figures; closing costs and rehab are one-time amounts paid at purchase.
Where the model stops
This is a screening model, and its omissions are deliberate rather than approximated. It does not model income taxes, depreciation deductions, appreciation, principal paydown as a return component, PMI, financing points, rent growth, or market cycles. Nothing on the page estimates how large any of those effects would be for a given property; they are simply absent, so the three outputs describe the steady cash economics of the inputs as entered and nothing beyond that. The methodology page lists the same omissions for every tool on the site, and the guide on cash flow and cash-on-cash return explains what the two financed figures do and do not capture.
The engine also refuses inputs it cannot compute from, and reports why in plain words rather than returning a misleading number. A down payment larger than the price is rejected with "The down payment cannot exceed the purchase price." A down payment of zero with no closing or rehab costs leaves nothing to divide cash flow by, and the message is "Enter a down payment (and any closing or rehab costs)." Negative entries, non-numeric entries, and values beyond the ranges the tool supports are refused the same way.
How to read the output
Start with the sign of monthly cash flow: positive means effective rent covers operating expenses and the payment on the inputs you entered; negative means it does not. Read cash-on-cash next to the cash-invested figure it is computed on — the same annual cash flow is a different percentage of a $52,000 outlay than of a $228,000 one. Read cap rate as a statement about the property and its price alone. Then change one input at a time — vacancy, operating expenses, the down payment — and watch which outputs move; the sections above show what each change does to the worked example. The calculator does not grade, rank, or compare results against any target, and the numbers are only as sound as the rent and expense figures you put in.
Frequently asked questions
What counts as an operating expense?
Property tax, insurance, maintenance and repairs, property management, HOA dues, utilities the owner pays, and reserves for big-ticket items such as a roof or HVAC. By convention operating expenses exclude mortgage principal and interest — that keeps NOI and cap rate independent of how the purchase is financed. The calculator computes the mortgage payment from the loan inputs and subtracts it separately, on the cash-flow line only.
Why include a vacancy allowance?
The model applies vacancy as a steady haircut: effective rent = monthly rent × (1 − vacancy%). A 0% entry means every dollar of scheduled rent is collected every month; any higher figure lowers effective rent, NOI, cash flow, cap rate, and cash-on-cash together. On the worked example, moving the allowance from 0% to 10% takes monthly cash flow from $379.07 to $159.07 and the cap rate from 8.45% to 7.25%. The figure is yours to enter; the model does not supply one, and a blank field is treated as 0%.
What is the difference between cap rate and cash-on-cash return?
Cap rate is annual NOI ÷ purchase price and never looks at the loan, so the 7.85% in the worked example is the same whether the buyer puts 20% down or pays the full $220,000 in cash. Cash-on-cash is annual cash flow ÷ cash invested, and both halves of that ratio change with the financing: 20% down gives 6.21% on $52,000 invested, while all cash gives 7.58% on $228,000. The guide on cash flow and cash-on-cash return walks through the mechanics.
Does this include appreciation, loan paydown, or taxes?
No. The model reports current cash economics only: what the property earns each month after operating expenses and the mortgage payment. It does not model income taxes, depreciation deductions, appreciation, principal paydown as a return component, PMI, financing points, rent growth, or market cycles. Those factors are absent rather than approximated, so the output is a screen of the cash-flow slice, not an estimate of total return.
Why is the cash flow negative while the cap rate is positive?
Because the two figures stop at different points. Cap rate stops at NOI, before the mortgage. Cash flow continues by subtracting the payment, so whenever the monthly payment exceeds effective rent minus operating expenses, cash flow goes negative while the cap rate stays positive. In the $300,000 example on this page the cap rate is 4.78% and the monthly cash flow is -$483.11: the $1,678.11 payment is larger than the $1,195.00 left after expenses.
What happens if I include the mortgage in operating expenses?
The payment is subtracted twice — once inside your expense entry and again on the cash-flow line — and NOI and cap rate, which should ignore financing entirely, are understated. Entering $1,820.93 of expenses on the worked example (the $650 of true operating costs plus the $1,170.93 payment) turns $269.07 of monthly cash flow into -$901.86 and drops the cap rate from 7.85% to 1.47%. Keep the mortgage out of the expense field; the calculator computes it from the loan inputs.
What is "cash invested", and why does the tool refuse when it is zero?
Cash invested is the down payment plus closing costs plus initial rehab — the cash that actually leaves your pocket at purchase. It is the denominator of cash-on-cash return, so when all three are zero the ratio has nothing to divide by and the engine returns: "Enter a down payment (and any closing or rehab costs)." Enter the cash you would actually put in, even when the down payment itself is small.
Does the calculator tell me whether a deal is good?
No. It reports three figures from the inputs you enter and does not compare them to any benchmark, target, or market. Whether a given cash flow, cash-on-cash return, or cap rate is acceptable depends on your own cost of capital, alternatives, and tolerance for risk, none of which the model knows. Treat the output as a screen that shows the shape of a deal, and verify anything consequential with your own due diligence and qualified professionals.
Not financial advice: a general educational estimate. Real deals involve taxes, appreciation, financing terms, and local factors this model excludes — verify any deal with your own due diligence and qualified professionals. Values are processed locally in your browser and never transmitted. See the methodology page.