Rental Income Calculator
Calculate rental property ROI including cash flow, cap rate, and return on investment with all expenses.
Purchase Details
$50,000
Rental Income
Annual Expenses
$2,500 / year
$0 / month
Monthly Cash Flow
-$13.94
-$167.26 / year
Cap Rate
6.3%
NOI / Purchase Price
Cash-on-Cash ROI
-0.3%
Annual Cash Flow / Down Payment
Monthly Mortgage
$1,330.6
on $200,000 loan
Total ROI After 30 Years (Cash Flow + Equity - Down Payment)
$595,701.68
1191.4% return on $50,000 down payment
Analyzing a rental property investment requires looking at multiple metrics to determine if the property will generate positive cash flow and a good return on your investment. This calculator accounts for all major income and expense categories to give you a comprehensive picture.
Key Metrics Explained
- Cash Flow: The money left over after all expenses (mortgage, taxes, insurance, maintenance, management) are subtracted from rental income. Positive cash flow means the property pays for itself and puts money in your pocket each month.
- Cap Rate: Net Operating Income (NOI) divided by the purchase price. NOI is rental income minus operating expenses (not including the mortgage). Cap rate lets you compare properties regardless of financing. A 6% cap rate means you would earn 6% per year if you paid all cash.
- Cash-on-Cash Return: Annual cash flow divided by your total cash invested (down payment). This is the actual return on the money you put in, accounting for leverage from the mortgage.
- Total ROI: Combines cumulative cash flow and equity buildup (from mortgage paydown) minus your initial down payment. This captures the full picture of your investment return over time.
The 1% Rule (Quick Screening)
A common rule of thumb is that monthly rent should be at least 1% of the purchase price. For a $250,000 property, that means $2,500/month in rent. Properties that meet this threshold are more likely to produce positive cash flow, though it is only a rough screening tool and not a substitute for full analysis.
Important Considerations
This calculator provides a simplified analysis. Real-world factors like property appreciation, tax deductions (mortgage interest, depreciation), capital expenditures (roof, HVAC replacement), closing costs, and market fluctuations will affect your actual returns. Always perform thorough due diligence and consider consulting a real estate professional before making an investment decision.