Real Estate Calculator
Analyze a rental property investment. Enter the price, the loan, the rent and the yearly costs. The calculator returns monthly and annual cash flow, net operating income, cap rate, cash-on-cash return, the gross rent multiplier and the monthly mortgage payment. It also gives break-even occupancy, and the return on your down payment over the years you hold it at the yearly appreciation you assume.
Your own assumption. Use 0 to see the return without any rise in value.
How to use the Real Estate Calculator
- Enter your numbers in the Real Estate Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The key real estate metrics
Cap rate = NOI / Property price · · · Cash-on-cash = Annual cash flow / Down payment · · · NOI = Rent after vacancy − operating expenses (excludes mortgage) · · · Break-even occupancy = (Costs + Mortgage) / Full yearly rent · · · Appreciation ROI = Rise in value / Down payment
Cap rate measures the property's yield without leverage. Cash-on-cash measures the return on the cash you put in, which this calculator takes to be the down payment. Operating expenses are property tax, insurance, maintenance and the management fee. Cash flow is NOI minus twelve mortgage payments a year, and monthly cash flow is that figure divided by 12.
Worked example
The calculator opens with a $300,000 property, $60,000 down, a 7% 30-year loan, $2,000 monthly rent, 5% vacancy, $3,600 property tax and $1,200 insurance a year, maintenance at 1% of the price a year and an 8% management fee. The mortgage is $1,596.73 a month and NOI is $13,080.00 a year, so the cap rate is 4.36%. After the mortgage, cash flow is −$6,080.76 a year, or −$506.73 a month, and cash-on-cash return is −10.13%. The gross rent multiplier is 12.5. Break-even occupancy is 120.34%, over 100% because the rent does not cover the costs even when full. At 3% appreciation over 10 years the appreciation ROI is 171.96% and the total ROI 127.36%, since the negative cash flow takes back part of the gain.
Frequently asked questions
What is break-even occupancy?
The share of a full year's rent that pays the yearly costs and the mortgage. At 80%, the property covers its costs if it stays rented 80% of the time. Over 100% means the rent falls short even with no vacancy. The management fee is taken on the full rent here, so it does not fall when the property is empty.
How is ROI with appreciation worked out?
The value grows by the yearly rate you type, compounded over the years you hold it. Appreciation ROI is that rise divided by the down payment. Total ROI adds the principal the payments repaid and the cash flow over the same years. Rent and costs stay flat, and selling costs, closing costs and taxes are left out, so a real sale nets less. The appreciation is your assumption, because no calculator knows what a property will sell for.
What's a good cap rate?
Varies by market. Hot urban areas may price at 4–5% cap; smaller cities or higher-risk neighborhoods 7–10%+. Cap rate inversely correlates with appreciation potential.
Do I need to include vacancy?
Yes. Most analysts use a 5–8% vacancy allowance on annual rent. Better to plan for some empty months than to assume 100% occupancy. The calculator takes vacancy as a percent and lowers the rent it counts by that share.
What is the 1% rule?
A quick screening rule: monthly rent should be at least 1% of purchase price. A $200,000 property should rent for $2,000+/month. Rarely achievable in hot coastal markets; common in the Midwest.