Rental Property Calculator
Advanced pro-forma analysis for serious real estate investors.
1. Acquisition & Financing
2. Operations (Monthly)
Rental Property Calculator
Before you buy a rental property, you need to know one thing: will it cash flow? This calculator runs a complete income and expense analysis so you know exactly what to expect from your investment before you sign anything.
What This Calculator Analyzes
Enter your property details and get: monthly cash flow, annual return, cap rate, gross rent multiplier, and cash-on-cash return — the complete picture of whether a rental property makes financial sense.
How to Use This Calculator
- Enter purchase price and down payment.
- Enter monthly gross rent (what tenants will pay).
- Enter vacancy rate (% of time unit is empty — typically 5%–10%).
- Enter monthly expenses: property tax, insurance, maintenance, management fee, HOA.
- Enter your mortgage payment (use our Mortgage Calculator to get this).
- Click Calculate to get your investment analysis.
Key Formulas
Effective Gross Income = Monthly Rent × 12 × (1 − Vacancy Rate)
NOI = Effective Gross Income − Annual Operating Expenses
Monthly Cash Flow = (NOI ÷ 12) − Monthly Mortgage Payment
Cap Rate = NOI ÷ Purchase Price × 100
Example Calculation
Purchase: $250,000 | Down: $50,000 | Rent: $2,000/month | Vacancy: 8% | Monthly expenses: $600 | Mortgage: $1,100
- Effective rent: $2,000 × 12 × 0.92 = $22,080/year
- Annual expenses: $7,200
- NOI: $14,880
- Annual mortgage: $13,200
- Annual cash flow: $14,880 − $13,200 = $1,680 ($140/month)
- Cap Rate: $14,880 ÷ $250,000 = 5.95%
- Cash-on-cash: $1,680 ÷ $50,000 = 3.36%
Common Mistakes to Avoid
- Ignoring vacancy — Even great properties sit empty between tenants. Budget for it.
- Skipping capital expenditure reserves — Set aside 5%–10% of rent for big repairs (roof, HVAC, plumbing).
- Using optimistic rent estimates — Research actual comparable rentals in the area before entering any number.
- Forgetting self-managing costs — Your time has value. Factor it in even if you don't hire a manager.
Frequently Asked Questions
What cash flow is considered good for a rental?
Most investors target at least $100–$200/month positive cash flow per unit at minimum. More is always better, but in competitive markets even breakeven with strong appreciation potential can make sense.
Should I buy in a different city for better returns?
Long-distance investing works but adds complexity. You'll almost certainly need a property manager, which cuts into returns. Research thoroughly and visit before buying remotely.
What is a gross rent multiplier (GRM)?
GRM = Purchase Price ÷ Annual Gross Rent. A GRM under 12 is generally favorable. It's a quick way to compare properties before doing a full analysis.
How do I increase my cash flow?
Raise rents (if market supports it), reduce expenses, add income (storage, parking, laundry), or refinance to lower your mortgage payment. See our Refinance Calculator.
How does rental income affect my taxes?
Rental income is taxable, but expenses (mortgage interest, taxes, insurance, depreciation, maintenance) are deductible. Consult a tax professional for your specific situation. See our Depreciation Calculator.
Conclusion
Rental property investing can build serious long-term wealth — but only when the numbers work. Use this calculator on every property you consider. A deal that looks good emotionally may not hold up mathematically, and vice versa.
Related: Real Estate Calculator | Mortgage Calculator | ROI Calculator | Depreciation Calculator
Expert Advice
Use the Payback Period to assess your risk. If it takes 20 years to get your initial cash back, the investment might be too illiquid for your portfolio goals.
