Rental Property Calculator
What a rental actually produces after every expense — including the ones people leave out, which are usually the ones that decide whether it works.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Monthly shortfall
$188/mo
The property does not cover itself: coverage is 0.90× and it needs $3,044 of rent to break even, against $2,800 today.
- $94,000
- Deposit, closing and rehab
- 5.68%
- Ignores financing, by design
- -2.4%
- Return on money at risk
- $1,656
- Monthly, before the mortgage
- 0.90×
- $3,044
Where the rent goes
Against the rent actually collected. The reserves are the lines people leave out, and they are the reason a property that looked profitable is not.
- Mortgage62%$1,844
- Tax, insurance, reserves34%$1,004
- Vacancy5%$140
- Monthly rent$2,800
How much rent this needs
Cash flow against rent, holding everything else. The gap between working and not working is usually smaller than people expect.
| Rent | Cash flow | vs yours | |
|---|---|---|---|
| $2,4004.62% cap · 0.73× coverage | -$496 | −$0 more in total | |
| $2,6005.15% cap · 0.81× coverage | -$342 | −$0 more in total | |
| $2,800yours5.68% cap · 0.90× coverage | -$188 | — | |
| $3,0006.21% cap · 0.98× coverage | -$34 | −$0 more in total | |
| $3,2006.73% cap · 1.07× coverage | $120 | −$0 more in total |
Three numbers, three questions
People quote whichever flatters the deal. Each answers something different, and you need all three.
- Cap rate
- 5.68%
- Prices the property. Excludes your mortgage entirely, so two buyers with different loans get the same figure.
- Cash-on-cash
- -2.4%
- Return on the money at risk. Leverage flatters it — which says nothing about whether the leverage was wise.
- Debt coverage
- 0.90×
- Whether the property pays its own loan. Below 1.00 it does not, and the shortfall comes out of your pocket every month.
How this calculator works
Three measures, computed separately because they answer different questions.
NOI = rent − vacancy − operating expenses
cash flow = NOI − mortgage
cap rate = NOI × 12 ÷ price
cash-on-cash = cash flow × 12 ÷ cash in
Operating expenses exclude the mortgage — that is what makes cap rate comparable between buyers. Reserves are a share of gross rent rather than of collected rent, because the roof ages whether or not the property was let that month.
Break-even rent is solved rather than searched for. Reserves scale with rent, so rent appears on both sides of the equation and has to be collected before dividing.
What is assumed
- Rent, expenses and the rate hold steady. Over a real holding period all three move.
- No tax treatment at all — see the disclaimer.
- No appreciation. It is upside, not income.
- The reserves you enter are actually set aside rather than spent.
A worked example
$350,000 with 20% down at 6.9%, $9,000 closing and $15,000 of rehab. $2,800 rent, 5% vacancy, $4,200 property tax, $1,800 insurance, and reserves of 5% maintenance, 5% capex, 8% management.
| Rent collected | 2,800 less 5% vacancy |
|---|---|
| Tax and insurance | (4,200 + 1,800) ÷ 12 |
| Reserves | 18% of $2,800 |
| Net operating income | 2,660 − 1,004 |
| Mortgage | $280,000 at 6.9% over 30 years |
| Monthly cash flow | 1,656 − 1,844.08 |
A 5.68% cap rate and it still loses $188 a month, because the financing costs more than the property produces. Coverage is 0.90×, below the 1.00 at which a property pays its own loan. This is exactly the deal that looks fine on a cap rate and bleeds every month.
Now remove the reserves and the vacancy, as an optimistic spreadsheet would: the same property shows $455.92 a month of positive cash flow. Nothing about the building changed. That gap — $644 a month — is the entire difference between the two ways people analyse rentals, and it is the difference between a deal that works and one that does not.
Questions people ask
Maintenance and capital expenditure are separate things and both are real. Maintenance is the running repair — a tap, a boiler service, a repaint between tenancies. Capital expenditure is the roof, the heating system, the windows: rare, large, and certain. Common practice is 5–10% of rent each, and the right figure depends on the age and condition of the building. What is never right is zero.
As a screen, not as an analysis. It says monthly rent should be at least 1% of the price, which filters obviously bad deals quickly. It ignores property tax, which varies enormously by location, and it ignores the interest rate entirely — so a property that passed in 2021 and one that passes today are not comparable investments. Use it to decide what to analyse, not what to buy.
Deliberately, so it describes the property rather than the buyer. Two people bidding on the same building with different deposits and different rates should get the same cap rate, because the building has not changed. That is what makes it comparable between deals. Cash-on-cash is the figure that accounts for your financing, and you need both.
No, and that is a real omission for an investment property. Depreciation, its recapture on sale, and the deductibility of mortgage interest all materially change the after-tax return, and all of them depend on your circumstances rather than the property. Treat the result as pre-tax and take it to an accountant who does this for landlords.
Not in cash flow, and not as the reason to buy. Appreciation is real over long periods and it is not income — it cannot pay a mortgage in a bad month. A property that only works if it appreciates is a bet, not an investment. Judge the deal on cash flow, and treat appreciation as the upside if it arrives.
Related calculators
A pre-tax estimate. It excludes depreciation, its recapture, the mortgage interest deduction and any appreciation, each of which is material and none of which is general.