Evaluate any rental property investment in seconds. Calculate monthly cash flow, cap rate, cash-on-cash return, and long-term ROI — completely free.
Evaluating a rental property comes down to three questions: Does it cash flow? What’s the return on my money? And will it appreciate over time? This calculator answers all three.
Monthly cash flow is the simplest metric — it’s what’s left after you pay the mortgage, taxes, insurance, and all operating expenses. Positive cash flow means the property pays for itself from day one. Negative cash flow means you’re subsidizing the investment out of pocket, betting on appreciation.
Cap rate (capitalization rate) measures the property’s income potential independent of financing. It’s calculated as Net Operating Income divided by the purchase price. This lets you compare properties apples-to-apples regardless of how they’re financed.
Cash-on-cash return tells you how hard your actual cash investment is working. It divides your annual cash flow by the total cash you put in (down payment + closing costs + repairs). A property with 20% down has a very different cash-on-cash than one with 5% down, even if the cap rate is identical.
Internal Rate of Return (IRR) captures the complete picture. It accounts for the timing of every dollar — your initial investment, each year’s cash flow, and the proceeds when you sell. IRR is the single best metric for comparing rental property investments to stocks, bonds, or other alternatives.
Before running full numbers, experienced investors use these screening rules to quickly filter properties. None are perfect alone — always run the complete analysis above.
1% Rule
Monthly rent ≥ 1% of purchase price
$200,000 property → $2,000/mo rent
Quick screening filter. Properties passing 1% tend to cash flow well. Below 0.8% rarely works with conventional financing.
50% Rule
50% of rent goes to non-mortgage expenses
$2,000/mo rent → $1,000/mo expenses
Includes taxes, insurance, maintenance, vacancy, and management. Use this for back-of-envelope analysis before running full numbers.
DSCR ≥ 1.25
NOI should be 1.25× annual debt service
$12,000 NOI ÷ $9,600 debt = 1.25x
Debt Service Coverage Ratio. Lenders require 1.2–1.25x minimum. Higher DSCR means more cushion if income drops or expenses spike.
Monthly Cash Flow
Rent collected minus mortgage, taxes, insurance, maintenance, and all other expenses.
Any positive number means the property pays for itself. $100–$200/door/month is a common target for buy-and-hold investors.
Negative cash flow means you’re subsidizing the investment. This can work if appreciation is strong, but it’s risky for first-time investors.
Cap Rate
Net Operating Income divided by purchase price. Measures the property’s income potential without financing.
4–6% in major metros, 6–10% in secondary markets. Higher cap rate = higher income relative to price, but often higher risk.
Cap rate ignores financing. Two investors buying the same property at the same cap rate will have very different returns if one puts 5% down and the other puts 50% down.
Cash-on-Cash Return
Annual cash flow divided by total cash invested (down payment + closing costs + repairs).
8–12% is a strong cash-on-cash. Above 12% is excellent. This is the best measure of how hard your actual dollars are working.
Leverage amplifies cash-on-cash in both directions. Low down payment boosts returns when things go well, but magnifies losses when they don’t.
IRR (Internal Rate of Return)
The annualized return accounting for the timing of all cash flows — investment, yearly cash flow, and sale.
10–15% is strong for rental properties. Above 15% is excellent. Compare to S&P 500 historical average of ~10% to benchmark.
IRR is sensitive to holding period and exit assumptions. Always stress-test by adjusting appreciation rate and selling costs.
Cap Rate
NOI ÷ Purchase Price
$12,000 NOI ÷ $200,000 = 6.0%
Cash-on-Cash Return
Annual Cash Flow ÷ Total Cash Invested
$3,600 ÷ $45,000 = 8.0%
NOI
Effective Income − Operating Expenses
Excludes mortgage — only property-level income and costs
IRR
Discount rate where NPV of all cash flows = 0
Accounts for timing of investment, cash flows, and sale
DSCR
NOI ÷ Annual Debt Service
$12,000 NOI ÷ $9,600 debt = 1.25x
Monthly Mortgage
P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
P = loan amount, r = monthly rate, n = total payments
Run conservative numbers. Use a higher vacancy rate (8–10%), lower rent estimates, and higher maintenance budgets than you think you’ll need. If the deal still works with pessimistic assumptions, it’ll work in practice.
Don’t ignore management costs. Even if you self-manage, budget 8–10% for management. Either you’ll eventually hire a manager, or your time has value. This calculator defaults to 0% for self-managing landlords, but adjust it to see the true picture.
Cash flow is king for small portfolios. Appreciation is a bonus, not a strategy. Focus on properties that cash flow positive from month one. You can’t predict appreciation, but you can calculate cash flow.
Stress-test your assumptions. What happens if rent drops 10%? If vacancy doubles? If you need a $5,000 repair in year two? Use this calculator to model worst-case scenarios. A deal that only works under perfect conditions isn’t a deal.
Look at the full picture, not just cash flow. A property with modest cash flow but strong equity buildup and appreciation can outperform a high-cash-flow property in a declining market. IRR captures this — compare it to what you’d earn in index funds.
Track everything once you buy. The difference between a good investment and a great one is knowing your actual numbers — not projections. Tools like Vantric help small landlords track rent, expenses, and maintenance in one place so you always know where you stand.
Underestimating expenses. New investors routinely forget about vacancy, maintenance reserves, property management, capital expenditures, and rising property taxes. The 50% rule exists for a reason — non-mortgage expenses often consume half of gross rent.
Using asking rent instead of market rent. Zillow estimates and landlord wishful thinking inflate returns on paper. Check actual comparable rents on Rentometer, Zillow Rental Manager, or local listings. Be honest about what the market will bear.
Ignoring closing costs and repairs. These increase your total cash invested, which directly lowers cash-on-cash return. A property that looks like an 8% cash-on-cash deal becomes 6% after you factor in $8,000 in closing costs and $12,000 in deferred maintenance.
Over-relying on appreciation. Betting on 5%+ annual appreciation to make a deal work is speculation, not investing. Conservative investors assume 2–3% appreciation (roughly inflation) and treat anything above that as a bonus.
Track tenants, collect rent, and manage maintenance — all in one place. Built for landlords with 1–10 units.
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