Rental Property Calculator
Run the numbers on a rental property. Enter the purchase price, down payment, loan rate and term, monthly rent, vacancy and yearly costs. You get monthly and annual cash flow, net operating income, cap rate, cash-on-cash return, the gross rent multiplier and the monthly mortgage payment. Add a yearly appreciation and a holding period to see break-even occupancy and the return on your down payment.
Your own assumption. Use 0 to see the return without any rise in value.
How to use the Rental Property Calculator
- Enter your numbers in the Rental Property Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The rental analysis metrics
Cap rate = NOI / Price · · · Cash-on-cash = Annual cash flow / Down payment · · · GRM = Price / Annual rent · · · Break-even occupancy = (Costs + Mortgage) / Full yearly rent · · · Appreciation ROI = Rise in value / Down payment
Net Operating Income (NOI) is rent after vacancy minus property tax, insurance, maintenance and the management fee. It leaves out the mortgage. Annual cash flow is NOI minus twelve mortgage payments, and monthly cash flow is that figure divided by 12. The gross rent multiplier uses the full rent before vacancy. Break-even occupancy divides the yearly costs and twelve mortgage payments by the full rent. Total ROI adds the rise in value, the principal repaid and the cash flow over the holding period, then divides by the down payment. Rent and costs stay flat, and selling costs, closing costs and taxes are left out.
Worked example
Take a $400,000 duplex with $100,000 down on a 6.5% 30-year loan, $3,600 monthly rent, 5% vacancy, $4,800 property tax and $1,800 insurance a year, maintenance at 1% of the price a year and no management fee. The mortgage is $1,896.20 a month and NOI is $30,440.00 a year, a 7.61% cap rate. Cash flow is $7,685.60 a year, or $640.47 a month, so cash-on-cash return is 7.69%. The gross rent multiplier is 9.3. Break-even occupancy is 77.21%. At 3% appreciation over 10 years the value reaches $537,566.55, for an appreciation ROI of 137.57%, and adding the principal repaid and the cash flow gives a total ROI of 260.09%.
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 77.21%, the property covers its costs if it stays rented about 77% 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.
How much should I reserve for repairs?
Most analysts use 5–10% of gross rent for repairs and 5–10% more for capital expenditures (roof, HVAC, big-ticket items). Older properties skew toward the higher end. The calculator takes maintenance as a yearly percent of the purchase price, so convert a rent-based figure before you enter it.
What about property management?
Hiring a property manager typically costs 8–12% of gross rent. Include this if you don't plan to self-manage. Your cash-on-cash drops noticeably, but your time investment falls dramatically. Enter 0 if you manage the property yourself.
Do I need to count vacancy?
Yes. 5–8% vacancy is a reasonable starting assumption. Account for the months between tenants, marketing time and turnover cleanup.