Analyze rental property investment returns
Analyze the financial performance of a rental property investment using our free calculator. Input purchase price, down payment, monthly rent, property taxes, insurance, HOA, management fees, vacancy rate, maintenance, and capital expenditure reserves to calculate monthly cash flow, cap rate, cash-on-cash return, and 5-year ROI.
Real estate investing can be a powerful wealth-building strategy, but successful investment requires careful analysis of numbers. Our rental property calculator provides a comprehensive financial picture, taking into account not just rental income and mortgage costs but also often-overlooked expenses like vacancy reserves, maintenance, and capital expenditures.
Key metrics like cap rate, cash-on-cash return, and 5-year ROI help you evaluate whether a property meets your investment criteria. Comparing these metrics across different properties can help you identify the best opportunities in your target market.
Monthly cash flow is effective rental income minus total expenses (taxes, insurance, HOA, management, vacancy, maintenance, CapEx) and mortgage debt service. Cap rate is NOI divided by purchase price. Cash-on-cash return is annual cash flow divided by total cash invested.
Cap rates typically range from 4% to 12% depending on the market and property type. A higher cap rate generally indicates higher potential return but often comes with higher risk.
This calculator assumes a 30-year fixed mortgage at 7% for simplicity. For more precise results, use the actual interest rate from your lender.
Cash-on-cash returns of 8–12% are generally considered good for rental properties. However, acceptable returns vary by market, property type, and your personal investment goals. Markets with higher appreciation potential may justify lower cash-on-cash returns.
A common rule of thumb is to set aside 1% of the property value annually for maintenance and capital expenditures. Many investors budget 5–10% of rental income for each category, which our calculator uses as defaults.
Yes, the 5-year ROI calculation includes assumed appreciation at 3% per year. Actual appreciation depends on market conditions, location, and timing. You can adjust your expectations accordingly.