Rental Property ROI Calculator
Evaluating a rental property investment? This calculator helps you analyze the potential returns including cash-on-cash return, cap rate, and monthly cash flow. Enter the purchase price, expected rent, and expenses to see if the numbers work.
How We Calculate This
Cash-on-cash return = Annual Cash Flow ÷ Total Cash Invested. Cap Rate = NOI ÷ Property Value. NOI (Net Operating Income) = Gross Rent - Operating Expenses (not including mortgage).
Frequently Asked Questions
What is a good cash-on-cash return?
Most investors target 8-12% cash-on-cash return. However, this varies by market and risk level. Some investors accept lower returns in appreciation markets.
What is cap rate?
Cap rate (capitalization rate) is the property's Net Operating Income divided by its value. It measures return as if you paid all cash. Higher cap rates = higher returns but often higher risk.
How much should I budget for maintenance?
Budget 1% of property value annually for maintenance, or use the 50% rule (50% of rent goes to expenses excluding mortgage). Older properties need more.
What vacancy rate should I assume?
Use 5-8% for well-located single-family homes, 8-10% for multi-family. Check local vacancy rates for your specific market.
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You might also find these calculators helpful: Mortgage Calculator, and Investment Return Calculator.