How to Use This Calculator
This calculator gives you a complete financial picture of any rental property in under 60 seconds. Here is how to get the most accurate results:
- Purchase price: Use the listing price or your offer amount. Include the full price, not just your down payment.
- Down payment: Most investment property loans require 20-25% down. FHA loans allow 3.5% for owner-occupied properties.
- Monthly rent: Check Zillow Rent Zestimate, Rentometer, or look at comparable rentals within 0.5 miles on Craigslist or Facebook Marketplace.
- Expenses: Property tax is usually on the county assessor website. Insurance can be quoted through Steadily or Obie. Budget 1-2% of property value per year for maintenance.
- Vacancy rate: 5% is standard for strong markets. Use 8-10% for less desirable areas or properties that take longer to fill.
Calculator
Rental Property ROI Calculator
Analyze cash flow, cap rate, and returns for any rental investment.
Purchase & Financing
Rental Income
Monthly Expenses
Monthly Breakdown
| Effective Rent | $1,710 |
| Mortgage (P&I) | -$1,331 |
| Property Tax | -$250 |
| Insurance | -$120 |
| Maintenance | -$150 |
| Monthly Cash Flow | -$141 |
Monthly Cash Flow
-$141
-$1,687/year
Returns
Investment Summary
Break-Even Analysis
Key Metrics Explained
Cash-on-Cash Return
8-12%
Your annual cash flow divided by your total cash invested. This is the most important metric for leveraged investors because it shows the return on YOUR money, not the property's total value.
Cap Rate
5-10%
Net Operating Income divided by property value. Useful for comparing properties regardless of financing. Higher cap rates mean higher returns but usually more risk.
Gross Yield
7-12%
Annual rent divided by purchase price. A quick screening metric. If gross yield is below 7%, it will be hard to cash flow with financing.
Break-Even Rent
Varies
The minimum rent needed to cover all expenses. If your actual rent is well above this number, you have a margin of safety against vacancies and unexpected costs.
Cash-on-Cash Return vs Cap Rate
New investors often confuse these two. Cap rate ignores your financing entirely.it assumes you paid all cash. Cash-on-cash return accounts for your mortgage, which is why it is the better metric when you are using leverage.
A property with a 6% cap rate might produce a 12% cash-on-cash return with 75% leverage, or a 3% cash-on-cash return with expensive hard money financing. Same property, wildly different returns depending on how you fund the deal.
Quick screening rule
What is a Good ROI on a Rental Property?
There is no universal answer, but here are the benchmarks experienced investors use:
- Cash-on-cash return above 8%: This is the minimum most investors target. Below 8%, you could arguably get similar returns from index funds with zero effort.
- Cap rate above 5%: In expensive coastal markets (SF, NYC, LA), cap rates often sit at 3-4%. In the Midwest and Southeast, 6-10% is common. Neither is inherently better.they represent different risk/appreciation tradeoffs.
- Positive cash flow from month one: Some investors accept negative cash flow betting on appreciation. This works until it does not. Cash flow positive from day one protects you against rate hikes, vacancies, and market downturns.
Example: Analyzing a $250,000 Duplex
After all expenses
$5,148 / $57,500
NOI $15,840 / $250,000
Common Mistakes When Analyzing Rentals
Underestimating expenses
New investors budget for mortgage, taxes, and insurance, then call the rest "cash flow." They forget maintenance (plan for 1-2% of value per year), capital expenditures (roof, HVAC, water heater.they will fail eventually), and management fees (8-10% of rent even if you self-manage, because your time has value).
Ignoring vacancy
A property that is vacant for one month out of twelve has an 8.3% vacancy rate. That one month erases most of your cash flow on a thin deal. Always model at least 5% vacancy, and 8-10% if the property is in a less desirable location or has higher turnover.
Using asking rent, not market rent
Sellers and listing agents will tell you the property "could rent for" a certain amount. Verify this with actual comparable rentals that are currently listed or recently rented within half a mile. Rentometer and Zillow Rent Zestimate are decent starting points, but nothing beats checking current listings in the area.
Frequently Asked Questions
How do I find accurate rental comps?
Should I include property management in my analysis even if I self-manage?
What vacancy rate should I use?
Is cash-on-cash return more important than cap rate?
How much should I budget for maintenance?
Related Tools
Continue your analysis with these calculators:
Mortgage Calculator
Monthly payments, total interest, and amortization schedule for any loan type.
BRRRR Strategy
Buy, Rehab, Rent, Refinance, Repeat. Model the full BRRRR cycle with real numbers.
Deal Analyzer
Quick deal-or-no-deal verdict with instant letter grading against 5 rules of thumb.
Vacancy & Cash Flow
Model vacancy rates per unit with sensitivity analysis and break-even vacancy.