Real Estate Calculator
Analyze a rental property purchase — cap rate, cash-on-cash return, monthly cash flow, and total return on investment over your expected holding period.
Results from this calculator are estimates provided for general informational purposes only, based on formulas, rates, and standards commonly accepted as of 2026. Figures may differ slightly from other calculators or professional sources due to rounding methods, differing assumptions, or regional regulations, and rules may change over time. Always consult a qualified professional — such as a financial advisor, healthcare provider, or other relevant specialist — before making decisions based on these results.
Monthly Cash Flow
-$134
Cap Rate
5.42%
Example
A $250,000 rental property with 20% down ($50,000) and $2,000/month rent generates a $13,560 annual net operating income, a 5.42% cap rate, and negative cash flow of $134/month (-2.58% cash-on-cash return).
Total Cash Invested
$62,500
Cash-on-Cash Return
-2.58%
Annual NOI
$13,560
Monthly Mortgage Payment
$1,264.14
Est. Sale Value (5 yrs)
$289,819
Total ROI (5 yrs)
14.2%
Monthly outflow breakdown
What is a Real Estate Calculator?
A real estate (rental property) calculator estimates whether an investment property will make or lose money once financing, rental income, vacancy, and operating expenses are all accounted for. It converts a purchase price and expected rent into the metrics real estate investors actually use to compare deals: net operating income, cap rate, cash flow, and cash-on-cash return.
It also projects a future sale, so you can see the total return — cash flow collected plus equity gained from appreciation and loan paydown — over your intended holding period.
Key Formulas
- NOI — effective rental income minus operating expenses, before the mortgage payment
- Cash Flow — NOI minus the mortgage payment; what's actually left in your pocket each month
- Total Cash Invested — down payment, closing costs, and any upfront repairs
Cap Rate vs. Cash-on-Cash Return
Cap rate measures a property's return as if it were purchased entirely in cash — useful for quickly comparing different properties regardless of how each is financed. Cash-on-cash return, by contrast, measures the return only on the cash you actually put in, so it's more sensitive to your financing terms — a smaller down payment or a lower interest rate can boost cash-on-cash return even when the cap rate stays the same.
The 1% and 50% Rules of Thumb
Many investors use quick screening rules before running full numbers. The 1% rule suggests gross monthly rent should be at least 1% of the purchase price (after any repairs) for a deal to be worth a closer look. The 50% rule assumes operating expenses will consume roughly half of gross rental income, leaving the other half for the mortgage payment — a rough sanity check before digging into exact numbers like the ones this calculator produces.
Why Cash Flow Tends to Improve Over Time
Sustainable rental properties generally show increasing cash flow each year, because a fixed-rate mortgage payment stays constant while rental income tends to rise with inflation and market rents. This growing gap between a static payment and rising income is one of the main long-term appeals of rental property investing, on top of the cash flow and appreciation already captured in this calculator's results.
Example — Your Current Inputs
A $250,000 rental property with 20% down ($50,000) and $2,000/month rent generates a $13,560 annual net operating income, a 5.42% cap rate, and negative cash flow of $134/month (-2.58% cash-on-cash return).
Additional Example — A Tight-Margin Deal
A $180,000 duplex renting for $1,600/month with 20% down, a 7% mortgage rate, and typical expenses might produce only $85/month in positive cash flow but a healthy 6.8% cap rate — illustrating why cap rate and cash flow can tell very different stories about the same property depending on how it's financed.
About These Parameters
- Purchase Price, Down Payment & Closing Costs
- These determine your loan amount and total cash invested. A larger down payment lowers your mortgage payment and increases cap rate's independence from financing, but ties up more of your own cash and can lower cash-on-cash return.
- Monthly Rent & Vacancy Rate
- Gross rent is what a fully-occupied unit collects; the vacancy rate accounts for the realistic gaps between tenants. A 5%–8% vacancy rate is a common planning assumption even in strong rental markets.
- Operating Expenses
- Property tax, insurance, HOA dues, maintenance, and management fees all reduce net operating income before the mortgage is even considered. Maintenance and management are entered as a percentage of rent since they typically scale with the size and value of the property.
- Appreciation, Holding Period & Selling Costs
- These project a future sale so the calculator can estimate total return: how much the property might be worth, what you'd pay in commissions and closing costs to sell it, and what's left after paying off the remaining mortgage balance.
Frequently Asked Questions
What's a "good" cap rate?
It depends heavily on the market — cap rates in expensive coastal cities often run 3%–5%, while higher-yield secondary markets can see 8%–10% or more. A higher cap rate generally signals higher return potential but also often higher risk or a less desirable location.
Why is my cash flow negative even though the cap rate looks fine?
Cap rate ignores financing entirely. If your mortgage payment is large relative to NOI — often from a small down payment or a high interest rate — cash flow can be negative even on a property with a perfectly respectable cap rate.
Should I include my own labor as a management expense?
Many self-managing landlords still budget a management fee (even 5%–8%) to keep the numbers realistic and to leave room to hire a manager later without erasing the deal's profitability.
Does this account for depreciation tax benefits?
No — this calculator focuses on operating cash flow and resale economics. Rental property also typically offers valuable depreciation deductions that reduce taxable income; consult a tax professional to factor those into your actual after-tax return.