Rental Property ROI Calculator
Analyze rental property investments with detailed cash flow projections. Calculate cap rate, cash-on-cash return, and see 5-year equity growth projections.
Rental Property ROI Calculator
Analyze your rental property investment
Monthly Cash Flow
-$297
-5.16% cash-on-cash return
5.2%
-5.16%
$69,000
-$3,561
Monthly Cash Flow Breakdown
Investment Analysis
5-Year Projection
| Year | Value | Equity | Cash Flow |
|---|---|---|---|
| Year 1 | $309,000 | $71,438 | -$3,561 |
| Year 2 | $318,270 | $83,322 | -$3,021 |
| Year 3 | $327,818 | $95,673 | -$2,463 |
| Year 4 | $337,653 | $108,514 | -$1,887 |
| Year 5 | $347,782 | $121,866 | -$1,293 |
- *Negative cash flow! You will need to add money each month to cover expenses.
- *Property doesn't meet the 1% rule (rent should be $3,000+/month for this price)
- *Break-even occupancy is 110% - very little margin for vacancies
- *No property management included - factor this in if you won't self-manage (typically 8-10% of rent)
How to Use This Calculator
Enter the purchase price and expected monthly rent. The calculator immediately shows if the property passes the 1% rule.
Set your down payment percentage and interest rate to calculate mortgage payments. Adjust the term for different scenarios.
Include all operating expenses - property taxes, insurance, HOA, and reserves for maintenance, CapEx, and vacancy.
Understanding Your Results
Monthly cash flow is what remains after all expenses and mortgage payments. Positive cash flow means the property pays for itself.
Cap rate measures property performance independent of financing. Use it to compare properties regardless of how they are financed.
Cash-on-cash return measures return on your actual cash invested. This is usually the most important metric for investors.
Frequently Asked Questions
What is cap rate?
Cap rate (capitalization rate) is Net Operating Income divided by purchase price. A $300,000 property with $18,000 NOI has a 6% cap rate. Higher cap rates indicate higher returns but often come with more risk.
What is cash-on-cash return?
Cash-on-cash return measures annual cash flow divided by total cash invested (down payment + closing costs). If you invested $60,000 and receive $4,800/year in cash flow, your cash-on-cash return is 8%.
What is the 1% rule?
The 1% rule is a quick screening tool: monthly rent should be at least 1% of purchase price. A $200,000 property should rent for $2,000+/month. Properties meeting this rule often cash flow well, but it is just a starting point.
What is CapEx reserve?
CapEx (Capital Expenditure) reserve is money set aside for major repairs - roof replacement, HVAC, appliances. Most investors reserve 5-10% of rent. Without this, one major repair can wipe out years of cash flow.
Should I include property management?
Include 8-10% for property management even if you plan to self-manage. Your time has value, and you may want professional management later. Including it gives you a more conservative (realistic) analysis.
What vacancy rate should I use?
Use 5-8% for single-family homes in good areas, 8-10% for multi-family or less desirable locations. Check local market data. Even one month vacancy per year is 8.3%.
Related Calculators
Found this calculator helpful?
Check out our other free calculators for everyday math problems.
View All Calculators