Rental Property Calculator (Cash Flow, Cap Rate, Cash-on-Cash)

Use this rental property calculator to estimate monthly cash flow, net operating income (NOI), cap rate, and cash-on-cash return from rent, financing, and common expenses.

How to use this calculator

1. Enter the Purchase price and your Down payment to set the loan size (purchase price minus down payment).
2. Enter Expected monthly rent. If you have extra income (parking, laundry), add it in Other monthly income under Advanced options.
3. Fill in the loan details: Interest rate and Loan term (years). This estimates your monthly principal + interest payment.
4. Open Advanced options and enter any one-time costs (closing costs, rehab, other lender fees). These increase your total cash invested and can lower cash-on-cash return.
5. Still in Advanced options, enter your monthly operating expenses (taxes, insurance, HOA, utilities you pay, maintenance, and CapEx reserve).
6. Add Vacancy rate (percent of rent you expect to lose to empty months) and Property management fee (percent of collected rent, after vacancy).
7. Click Calculate.
8. Read the results: NOI and Cap rate help compare properties without financing; Cash flow and Cash-on-cash return show how the deal looks with your loan and cash invested.
9. If you see a Warnings message (like down payment bigger than purchase price, or vacancy percent out of range), fix the inputs and calculate again.

Methodology

What this calculator is doing

It estimates (1) monthly and yearly operating performance (income minus operating expenses), then (2) your cash flow after the mortgage, and then (3) common return metrics: cap rate and cash-on-cash return.

Definitions (plain English)

Operating expenses: Ongoing costs to run the property (taxes, insurance, HOA, owner-paid utilities, maintenance, CapEx reserve, and management). These do not include the mortgage payment.
NOI (net operating income): Income after operating expenses, before the mortgage. [1]
Cap rate: Annual NOI divided by purchase price, as a percent. It ignores your loan on purpose. [2]
Cash-on-cash return: Annual cash flow divided by the cash you actually put in upfront, as a percent. [3]
DSCR: Monthly NOI divided by the monthly mortgage principal + interest payment (a lender-style coverage ratio).

Inputs turned into monthly numbers

All expenses in the form are monthly. Percent inputs are converted to decimals using decimal = percent / 100. Loan term months = loan term years * 12.

Step 1: Loan amount

Loan amount = purchase price - down payment. If the result is 0 or less, the calculator treats it as a cash purchase and sets the mortgage payment to $0.

Step 2: Monthly mortgage payment (principal + interest)

For a fixed-rate loan: monthly mortgage payment (principal + interest) = (loan amount * r * (1 + r)^n) / ((1 + r)^n - 1), where r is the annual interest rate / 12, and n is the number of months. If the interest rate is 0%, payment = loan amount / n.

Step 3: Effective monthly income (after vacancy)

Scheduled monthly income = monthly rent + other monthly income. Effective monthly income (after vacancy) = scheduled monthly income * (1 - vacancy rate).

Step 4: Management fee and operating expenses

Management fee (monthly) = (monthly rent * (1 - vacancy rate)) * management fee rate. Total monthly operating expenses (no mortgage) = taxes + insurance + HOA + owner-paid utilities + maintenance + CapEx reserve + management fee.

Step 5: NOI (monthly and annual)

NOI (monthly) = effective monthly income - operating expenses. NOI (annual) = NOI (monthly) * 12. This matches the common NOI idea used in real estate analysis. [1]

Step 6: Cash flow (monthly and annual)

Cash flow (monthly) = NOI (monthly) - monthly mortgage payment (principal + interest) - PMI (monthly). Cash flow (annual) = cash flow (monthly) * 12.

Step 7: Cap rate and cash-on-cash return

Cap rate (percent) = (NOI annual / purchase price) * 100. [2] Total cash invested (upfront) = down payment + closing costs + rehab costs + other lender fees. Cash-on-cash return (percent) = (annual cash flow / total cash invested) * 100. [3]

Step 8: DSCR and break-even rent

DSCR = NOI (monthly) / monthly mortgage payment (principal + interest). If the mortgage payment is $0 (cash purchase), DSCR is shown as N/A. Break-even rent is the rent needed for $0 monthly cash flow, given your vacancy rate, management percent, other income, operating expenses, mortgage, and PMI. To avoid a circular calculation, the break-even rent formula uses operating expenses without the management fee: break-even rent = (operating expenses without management + mortgage payment + PMI - other monthly income) / (1 - vacancy rate - management fee rate * (1 - vacancy rate)). If the denominator is 0 or negative, break-even rent is shown as N/A and a warning explains that vacancy and management assumptions are too high for this formula.

Validation and safety checks

The calculator blocks or warns on common input problems: purchase price must be greater than 0; down payment must be between 0 and purchase price; loan term must be greater than 0; interest rate cannot be negative; vacancy and management percent must be between 0 and 100; and monthly expenses cannot be negative. It also avoids divide-by-zero and Infinity results by showing N/A where a ratio would be undefined.

Sources