The Rental Property Calculator helps you analyze a real estate investment. Enter the purchase, financing, income, expense, and sale details below, then click Calculate to see your cash flow, capitalization rate, cash-on-cash return, internal rate of return (IRR), and total profit when sold.
The rental property calculator is a comprehensive tool for evaluating the profitability of a real estate investment. By entering the purchase price, financing terms, operating expenses, rental income, and sale assumptions, you instantly see the key metrics that investors use to judge a deal: monthly and annual cash flow, the capitalization rate, the cash-on-cash return, the internal rate of return (IRR), and the total profit you would earn when you eventually sell. It also produces a detailed first-year income and expense breakdown so you can see exactly where your money comes from and goes.
Whether you are weighing your first rental, comparing two potential properties, or stress-testing a buy-and-hold strategy, this calculator turns a long list of assumptions into clear, comparable numbers.
A profitable rental property generates positive cash flow, appreciates in value over time, and delivers a return that beats alternative investments after accounting for risk and effort. Real estate offers several distinct ways to make money, and a strong deal usually benefits from more than one of them:
Cash flow is the most fundamental measure of a rental's health. It is the net amount of money the property produces after all income and all expenses, including the mortgage:
Cash Flow = Net Operating Income − Mortgage Payments
Positive cash flow gives you a cushion against vacancies and unexpected repairs and is the safest path to long-term wealth. Negative cash flow means you must feed the property out of pocket each month - a risk that only makes sense if you are confident in strong appreciation.
NOI is the income a property generates after operating expenses but before the mortgage and income taxes. It is the purest measure of a property's earning power:
NOI = (Rental Income − Vacancy) − Operating Expenses
Operating expenses include property taxes, insurance, maintenance, HOA dues, management fees, and other recurring costs - but not the mortgage payment, which is a financing cost rather than an operating cost.
The cap rate expresses the property's first-year NOI as a percentage of its purchase price. It lets you compare properties of different sizes and prices on equal footing, as if you bought them with cash:
Cap Rate = Annual NOI ÷ Purchase Price × 100%
A higher cap rate generally indicates higher potential return (and often higher risk). Typical cap rates range from about 4% in expensive, low-risk markets to 10% or more in higher-risk or lower-cost areas. Cap rate ignores financing, so it isolates the quality of the property itself.
Cash-on-cash return measures the total profit relative to the actual cash you invested (down payment, closing costs, and any repair costs). Unlike the cap rate, it accounts for the leverage from your mortgage, which is why it can be much higher than the cap rate when you finance the purchase:
Cash-on-Cash = Total Profit ÷ Total Cash Invested × 100%
The IRR is the most complete single measure of a long-term real estate investment. It is the annualized rate of return that accounts for the timing of every cash flow - your initial investment, each year's cash flow, and the lump sum you receive when you sell. A higher IRR means your money is working harder. Because it factors in the time value of money, IRR is the best metric for comparing a rental against other investments like stocks or bonds.
The calculator projects your investment year by year over your chosen holding period. For each year it grows your rent and expenses by the annual increase rates you specify, subtracts vacancy and operating costs to find that year's NOI, and then subtracts the mortgage payment to find that year's cash flow. When you sell, it calculates your net sale proceeds (sale price minus selling costs minus the remaining loan balance) and combines everything to produce your total profit and IRR.
Example: Consider a $200,000 property bought with 20% down ($40,000) plus $6,000 in closing costs, for a total cash investment of $46,000. With $2,000 monthly rent, 5% vacancy, and the default operating expenses, the first-year NOI is about $16,100, giving an 8.05% cap rate. After the mortgage, first-year cash flow is roughly $4,588. Held for 20 years with 3% annual appreciation and an 8% cost to sell, the investment produces a total profit of about $402,304 - an 18.42% internal rate of return per year.
Enter the property's purchase price and choose whether you are using a loan. If financing, specify your down payment percentage, interest rate, and loan term. Using leverage (a mortgage) typically boosts your cash-on-cash return and IRR when the property performs well, but it also increases risk because you must make the mortgage payment regardless of vacancy.
Closing costs cover loan fees, title, escrow, and other one-time purchase expenses. If the property needs renovation before renting, select "Need Repairs," enter the repair cost (added to your cash invested), and the after-repair value (ARV), which becomes the basis for future appreciation. This models the popular BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy.
Enter annual amounts for property taxes, insurance, HOA dues, maintenance, and other costs, along with how much each grows per year. Realistic expense estimates are critical - many new investors underestimate maintenance and vacancy, which turns an apparently profitable deal into a money-loser.
Enter the monthly rent and any other monthly income, plus their annual growth rates. The vacancy rate accounts for periods when the unit sits empty between tenants (5% is a common assumption). The management fee, if you hire a property manager, is typically 8-12% of collected rent; enter 0 if you self-manage.
Choose whether you know your future sale price or want to estimate it from an annual appreciation rate. Set your holding length (how many years you plan to own the property) and the cost to sell (real estate commissions and closing costs, typically 6-8% of the sale price).
Experienced investors use rules of thumb to quickly screen properties before running detailed numbers:
These screens are useful for narrowing a list, but always follow up with a full analysis like the one this calculator provides before making an offer.
Real estate can build substantial wealth, but it is not without risk. Be realistic about the following before you buy:
It depends on the market and risk level. Cap rates of 4-5% are common in expensive, low-risk metro areas, while 8-10%+ cap rates appear in higher-risk or lower-cost markets. There is no universal "good" cap rate - compare it to other properties in the same area and to your required return.
Cap rate measures the property's return as if you paid all cash, ignoring financing. Cash-on-cash return measures your return on the actual cash you invested, including the effect of your mortgage. With leverage, cash-on-cash return is usually higher than the cap rate when the deal performs well.
IRR accounts for the timing and size of every cash flow over the entire holding period, including the sale. Because it incorporates the time value of money, it lets you compare a rental directly against other investments like stocks or bonds on an apples-to-apples basis.
Using a mortgage (leverage) typically increases your cash-on-cash return and IRR when the property performs well, because you control a larger asset with less of your own money. However, leverage also increases risk: you must make payments even during vacancies, and a market decline hurts more. Cash purchases are safer and produce steadier (if lower) returns.
The most commonly underestimated costs are vacancy, capital expenditures (big-ticket replacements like roofs and HVAC), property management, and maintenance. Forgetting these makes a deal look far more profitable than it really is. A realistic analysis includes generous allowances for all of them.
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. Investors buy an undervalued property, renovate it to increase its value (the after-repair value), rent it out, then refinance based on the higher value to pull their capital back out and reinvest it in the next deal. Enter a repair cost and after-repair value in the calculator to model this approach.