Rental returns come from four sources: cash flow, loan paydown, appreciation and tax benefits. A property that loses money each month can still be a good investment if it appreciates – but it’s riskier.
How to use the Rental Property Calculator
- Purchase price
- Down payment
- Closing and repair costs
- Interest rate
- Loan term
- Monthly rent
- Vacancy rate
- Management fee
- Property tax (yearly)
- Insurance (yearly)
- Maintenance and repairs (yearly)
- HOA fee (monthly)
- Value appreciation (yearly)
- Holding period
- Selling costs
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the purchase and loan details, the rent and vacancy, operating costs, appreciation and holding period.
Tips
- Get a written loan estimate and compare the APR, not just the interest rate.
- Include property tax, insurance, HOA fees and maintenance in your monthly budget.
- A larger down payment lowers the payment and can remove mortgage insurance.
- Rates change daily – use a current quote for the most accurate result.
Common mistakes to avoid
- Looking only at the monthly payment instead of the total cost of the loan.
- Forgetting closing costs and fees.
- Assuming home prices always rise.
Inputs explained
| Field | What to enter |
|---|---|
| Purchase price | Amount in your currency |
| Down payment | In % |
| Closing and repair costs | Amount in your currency |
| Interest rate | In % |
| Loan term | In years |
| Monthly rent | Amount in your currency |
| Vacancy rate | In % |
| Management fee | In % |
| Property tax (yearly) | Amount in your currency |
| Insurance (yearly) | Amount in your currency |
| Maintenance and repairs (yearly) | Amount in your currency |
| HOA fee (monthly) | Amount in your currency |
| Value appreciation (yearly) | In % |
| Holding period | In years |
| Selling costs | In % |
What each result means
- Loan amount = [Purchase price]×(1 – [Down payment]÷100)
- Monthly loan payment = pmt([Interest rate]÷1200, [Loan term]×12, [Loan amount])
- Effective gross income (yearly) = [Monthly rent]×12×(1 – [Vacancy rate]÷100)
- Net operating income (yearly) = [Effective gross income (yearly)]×(1 – [Management fee]÷100) – [Property tax (yearly)] – [Insurance (yearly)] – [Maintenance and repairs (yearly)] – [HOA fee (monthly)]×12
- Monthly cash flow = [Net operating income (yearly)]÷12 – [Monthly loan payment]
- Cap rate = [Net operating income (yearly)]÷[Purchase price]×100
- Cash invested = [Purchase price]×[Down payment]÷100 + [Closing and repair costs]
- Cash on cash return = [Monthly cash flow]×12÷[Cash invested]×100
- Selling price after the holding period = [Purchase price]×(1 + [Value appreciation (yearly)]÷100)^[Holding period]
- Equity at sale after costs and loan payoff = [Selling price after the holding period]×(1 – [Selling costs]÷100) – max(bal([Loan amount], [Interest rate]÷1200, [Loan term]×12, [Holding period]×12), 0)
- Total profit = [Monthly cash flow]×12×[Holding period] + [Equity at sale after costs and loan payoff] – [Cash invested]
- Annualized return (approx.) = ((([Equity at sale after costs and loan payoff] + [Monthly cash flow]×12×[Holding period])÷[Cash invested])^(1÷[Holding period]) – 1)×100
Example values
How the main result changes when Purchase price changes and everything else stays at the example values above:
| Purchase price | Monthly cash flow |
|---|---|
| 150,000 | 674.13 |
| 225,000 | 299.9 |
| 300,000 | -74.33 |
| 375,000 | -448.56 |
| 450,000 | -822.8 |
| 600,000 | -1,571.26 |
Formula
NOI = rent × (1 − vacancy) × (1 − management) − tax − insurance − maintenance − HOA − otherCash flow = NOI − mortgage paymentsCap rate = NOI ÷ price; cash on cash = cash flow ÷ cash investedTotal return = cash flows + equity at sale − cash investedWorked example
Inputs — Purchase price: $300,000; Down payment: 25 %; Closing and repair costs: $9,000; Interest rate: 7 %; Loan term: 30 years; Monthly rent: $2,400; Vacancy rate: 5 %; Management fee: 8 %; Property tax (yearly): $3,600; Insurance (yearly): $1,500; Maintenance and repairs (yearly): $3,000; HOA fee (monthly): $0; Value appreciation (yearly): 3 %; Holding period: 10 years; Selling costs: 6 %.
Results — Loan amount = $225,000.00; Monthly loan payment = $1,496.93; Effective gross income (yearly) = $27,360.00; Net operating income (yearly) = $17,071.20; Monthly cash flow = $-74.33; Cap rate = 5.69 %; Cash invested = $84,000.00; Cash on cash return = -1.06 %; Selling price after the holding period = $403,174.91; Equity at sale after costs and loan payoff = $185,906.56; Total profit = $92,986.88; Annualized return (approx.) = 7.74 %.
Frequently asked questions
What is a good return on a rental property?
Many investors aim for 8–12% cash on cash and positive cash flow.
What expenses should I include?
Vacancy, management, taxes, insurance, maintenance, HOA and capital repairs.
What is the 1% rule?
A quick screen: monthly rent should be at least 1% of the purchase price.
What formula does the Rental Property Calculator use?
NOI = rent × (1 − vacancy) × (1 − management) − tax − insurance − maintenance − HOA − other.