Rental Property Calculator
Analyze any rental property deal in seconds. Get an instant deal verdict, cap rate, cash-on-cash return, DSCR, monthly cash flow, and 10-year equity projection. Test scenarios, compare properties, and export a shareable deal analysis. Free, no login, 100% in your browser.
How to Use the Rental Property Calculator
Start by entering the purchase price, down payment percentage, mortgage rate, and loan term. Then add your expected monthly rent, vacancy rate, and operating expenses — property tax, insurance, maintenance reserve, management fee, HOA, CapEx reserve, and utilities. The calculator instantly computes your monthly cash flow, cap rate, cash-on-cash return, DSCR, and total ROI including appreciation, equity buildup, and tax benefits. Each metric updates in real time as you adjust inputs, so you can quickly see how different assumptions change the deal.
Understanding Cap Rate, CoC Return & DSCR
Cap rate (capitalization rate) measures the property’s annual net operating income as a percentage of the purchase price. It tells you the return the property generates independent of how you finance it. A 7% cap rate means the property produces $7,000 in NOI for every $100,000 of value. Higher cap rates mean higher income relative to price, but may also indicate higher-risk neighborhoods or older properties that need more maintenance.
Cash-on-cash return measures the annual cash flow you receive relative to the total cash you invested (down payment + closing costs + rehab). Unlike cap rate, CoC accounts for your financing. With leverage, your CoC return can exceed the cap rate — that’s the power of using a mortgage. A property with a 6% cap rate can deliver 10%+ CoC return with favorable financing.
DSCR (Debt Service Coverage Ratio) measures whether the property’s income covers its debt payments. DSCR = NOI ÷ Annual Mortgage Payments. A DSCR of 1.25 means the property earns 25% more than needed to cover the mortgage. Most DSCR lenders require at least 1.2. Below 1.0 means the property loses money each month after the mortgage.
The 5 Investor Rules Every Buyer Should Know
The 1% rule says monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for $2,000/month minimum. The 2% rule is the stricter version — achieving it almost guarantees strong cash flow, but it’s rare in expensive markets.
The 50% rule estimates that operating expenses (excluding mortgage) will consume about 50% of your gross rental income over time. If your numbers show expenses at only 30%, you may be underestimating maintenance, vacancy, or CapEx reserves.
The Gross Rent Multiplier (GRM) is the purchase price divided by annual gross rent. A GRM below 15 is generally favorable — it means you’re paying less than 15 years’ worth of gross rent for the property. The DSCR rule requires a minimum 1.25 ratio to ensure comfortable debt coverage with margin for vacancies and repairs.
How to Analyze a Rental Property Deal (Step by Step)
Step 1: Gather the numbers. Get the asking price, estimated rent from Zillow or Rentometer, property tax from the county assessor, insurance quotes, and the current mortgage rate for investment properties.
Step 2: Run the basic metrics. Calculate cap rate, CoC return, and monthly cash flow. Check against the 1% rule as a quick screen. If the property fails the 1% rule and has a cap rate below 5%, it’s likely a poor cash-flow play.
Step 3: Stress test. Use the What-If simulator to see what happens if vacancy increases by 5%, rent drops $200/month, or rates rise 1%. A good deal survives stress scenarios without going negative.
Step 4: Project long-term. The 10-year wealth builder chart shows how mortgage paydown, appreciation, and cumulative cash flow compound your initial investment over time. Even a property with modest monthly cash flow can build substantial equity.
Step 5: Compare and decide. Save multiple analyses to history, compare properties side-by-side, and use the Scenario A vs B panel to evaluate different financing strategies for the same property.
Tax Benefits of Rental Property Investing
Rental property offers three major tax deductions. Depreciation allows you to deduct the cost of the building (not the land) over 27.5 years for residential property. On a $200,000 property with 20% land value, that’s $5,818/year in phantom deductions that reduce your taxable income without any actual cash expense. Mortgage interest is fully deductible on investment properties — in the early years of a 30-year mortgage, most of your payment is interest. Operating expenses — property tax, insurance, maintenance, management fees, repairs, and travel to the property — are all deductible. Combined, these tax benefits can add 2-4% to your effective return on investment.
Frequently Asked Questions
What is a good cap rate for a rental property?
It depends on the market. In expensive coastal cities (San Francisco, NYC), 3-5% cap rates are common. In the Midwest and South, 6-10% is achievable. Generally, 5-7% is average, 7-10% is strong, and above 10% is excellent but may signal higher risk.
How much cash flow should a rental property produce?
Most investors target $100-200/month per unit minimum after all expenses including reserves. $300-500 is strong, $500+ is excellent. Below $100 leaves little margin for surprises.
What is the 50% rule in real estate?
The 50% rule estimates that operating expenses (everything except the mortgage) will average about 50% of gross rental income over the long term. Use it as a reality check — if your numbers show expenses at only 30% of rent, you’re likely underestimating.
Is DSCR important for rental property investing?
Yes. DSCR tells you whether the property can cover its mortgage from rental income. A DSCR below 1.0 means you’re losing money each month. Most lenders require 1.2-1.25 minimum. Higher DSCR gives you a buffer for unexpected vacancies or repairs.
How does the 1% rule work?
The 1% rule is a quick screening tool: monthly rent should be at least 1% of the purchase price. A $250,000 property should rent for $2,500/month. Properties that pass the 1% rule are more likely to cash-flow positively. The 2% rule is stricter and harder to find, but almost guarantees strong cash flow.
What is cash-on-cash return?
Cash-on-cash return is your annual net cash flow divided by the total cash you invested (down payment + closing costs + rehab). It measures the actual return on the money you put in, accounting for leverage. A property with 8% cap rate can deliver 12%+ CoC return with a mortgage. Target 8-12% minimum for traditional buy-and-hold rentals.