Use this Real Estate Calculator to estimate monthly cash flow and key rental metrics like Net Operating Income (NOI), cap rate, cash-on-cash return, and DSCR based on your assumptions. You can also switch to Required rent mode to find the monthly rent you would need to hit a target cash flow or target DSCR.
Advanced options
How to use this calculator
- Pick a mode: use "Cash flow and returns" to analyze a deal, or "Required rent" to solve for the rent needed to hit a goal.
- Enter the purchase price and down payment (your upfront cash toward the price).
- Enter the interest rate (percent per year) and loan term (years) to estimate the monthly mortgage payment (principal and interest).
- If you are in "Cash flow and returns" mode, enter the expected monthly rent.
- Open Advanced options and enter vacancy rate and any other monthly income (like parking or laundry), if you have it.
- Still in Advanced options, enter monthly operating expenses like taxes, insurance, HOA, repairs, capex reserve, and (optional) a property management percent.
- Add upfront one-time costs (closing costs and initial repairs) so cash-on-cash return uses a more realistic cash invested number.
- If you are in "Required rent" mode, choose a target type (target monthly cash flow or target DSCR) and enter your target value.
- Click Calculate to see the results and read any warnings, then adjust assumptions to test better or worse scenarios.
Methodology
What this calculator is for
This tool estimates rental property performance from the numbers you enter. The results are not a guarantee. Small changes in rent, vacancy, or expenses can change cash flow and returns a lot.
Definitions (plain English)
Monthly mortgage payment (principal and interest): The loan payment for the amount you borrowed. It does not include property taxes, insurance, or HOA unless you enter those as expenses.
Vacancy rate: The percent of rent you expect to lose because the unit is empty or rent is not collected.
Operating expenses: Monthly costs to run the property (taxes, insurance, HOA, repairs, reserves, management). This excludes the mortgage.
Net Operating Income (NOI): Income after vacancy minus operating expenses, before the mortgage.
Cap rate: NOI per year divided by purchase price, shown as a percent. It ignores how you finance the deal [1].
Cash-on-cash return: Annual cash flow divided by the cash you invested upfront, shown as a percent.
DSCR (Debt Service Coverage Ratio): NOI divided by debt payments (mortgage principal and interest).
Break-even occupancy: The occupancy rate needed so income covers operating expenses and the mortgage.
Inputs turned into monthly and annual numbers
Percent inputs are converted to decimals using decimal = percent / 100. Monthly-to-annual conversion uses 12 months per year.
Step 1: Loan amount and mortgage payment
Loan amount = purchase price minus down payment. If down payment is greater than purchase price, loan amount is set to 0 (cash purchase).
Monthly mortgage payment (principal and interest): If loan amount is L, monthly interest rate is r, and number of payments is n, then payment = L * r * (1+r)^n / ((1+r)^n - 1). Here r = (interest rate percent / 100) / 12 and n = loan term years * 12. If interest rate is 0, payment = L / n.
Step 2: Effective monthly income (after vacancy)
Effective gross income (monthly) = (monthly rent + other monthly income) * (1 - vacancy rate). Vacancy rate must be between 0% and 100%.
Step 3: Monthly operating expenses
Property management (monthly) = monthly rent * management rate. Management rate must be between 0% and 100%.
Total operating expenses (monthly) = property taxes + insurance + HOA + repairs and maintenance + capex reserve + management cost. These are the non-mortgage costs.
Step 4: NOI, cash flow, and returns
NOI (annual) = (effective monthly income - operating expenses) * 12. NOI can be negative.
Monthly cash flow (after mortgage) = effective monthly income - operating expenses - monthly mortgage payment. This is a pre-tax estimate.
Cap rate (percent) = (NOI annual / purchase price) * 100 [1]. If purchase price is 0 or less, cap rate is not computed.
Total cash invested (upfront) = down payment + closing costs + initial repairs.
Cash-on-cash return (percent) = (annual cash flow / total cash invested) * 100, where annual cash flow = monthly cash flow * 12. If total cash invested is 0 or less, cash-on-cash return is shown as N/A.
DSCR = NOI annual / (monthly mortgage payment * 12). If the mortgage payment is 0, DSCR is shown as N/A (no mortgage).
Break-even occupancy (percent) = ((operating expenses + monthly mortgage payment) / (monthly rent + other monthly income)) * 100. If total income (rent + other income) is 0 or less, break-even occupancy is shown as N/A. Values above 100% mean it cannot break even at that rent.
Solve-for mode: required rent
In Required rent mode, the calculator solves for the monthly rent needed to hit your target. It treats management as a percent of rent, and splits operating expenses into two parts: fixed operating expenses (taxes, insurance, HOA, repairs, capex) plus management (percent of rent).
Let op_ex_fixed be the monthly operating expenses excluding management. Let vacancy rate and management rate be decimals.
Required rent for a target monthly cash flow: required rent = ((target cash flow + op_ex_fixed + monthly mortgage payment) / (1 - vacancy rate - management rate)) - other monthly income. If (1 - vacancy rate - management rate) is 0 or less, rent cannot be solved.
Required rent for a target DSCR: required rent = ((target DSCR * monthly mortgage payment * 12)/12 + op_ex_fixed) / (1 - vacancy rate - management rate) - other monthly income. If monthly mortgage payment is 0, a DSCR target is not applicable.
Validation and safety rules
The calculator blocks negative costs, requires purchase price greater than 0, and requires loan term at least 1 year. It shows N/A instead of dividing by zero, and it displays warnings when a result would be misleading (for example, zero income, no mortgage for DSCR, or cash invested is 0).