How to Use This Calculator
Enter the property purchase price, down payment percentage, mortgage rate, rental income, and estimated annual expenses to evaluate a rental property investment.
Formula
Cap Rate = NOI / Purchase Price × 100
Cash-on-Cash Return = Annual Cash Flow / Down Payment × 100
NOI = Annual Rent - Annual Expenses
Examples
Example
$250,000 property with 25% down, 7% rate, $2,000/mo rent, $5,000/yr expenses:
Monthly Cash Flow: $371
Cap Rate: 7.6%
Cash-on-Cash: 7.1%
Frequently Asked Questions
What is a good cap rate?
Cap rates vary by market. Generally, 4-6% in major cities and 8-12% in smaller markets. A higher cap rate means higher potential return but often more risk.
What expenses should I include?
Include property taxes, insurance, maintenance/repairs (budget 1-2% of property value), vacancy (5-10% of rent), and property management fees (8-12% of rent if using a manager).