Monthly Rental Income

Net monthly rental income —

Gross scheduled rent: —
Income actually collected: —
Monthly operating expenses: —
Net income per year: —
Expense ratio: —

Where each month's rent goes

The chart appears with your result

Monthly rental income is the rent you collect after vacancy, minus operating costs. One house let at $2,000 with a 5% vacancy allowance collects $1,900; take off a 10% management fee ($190), $200 of property tax, $100 of insurance and $100 of repairs, and $1,310 a month is left, or $15,720 a year.

About this tool

Listing rent is not what a landlord keeps. Months between tenants, a letting agent's cut, the tax bill and the insurance premium all come out first. This calculator starts from the rent per unit and the number of units, removes a vacancy allowance, adds side income such as parking or laundry, then subtracts the running costs you enter. Annual bills like property tax and insurance are spread over twelve months. You get the net figure for a month and a year, the expense ratio, and a donut chart showing how each month's rent is divided. It is an operating view only: financing costs, depreciation and income tax are left out, so the result is closer to net operating income than to the cash or taxable profit in your own accounts.

How to use it

Set the units and rent
Use the − and + buttons for the number of rented units and type the average monthly rent per unit, plus any parking or laundry income.
Allow for vacancy
Drag the vacancy slider to the share of rent you expect to lose to empty months and arrears; 5% is roughly 18 empty days a year.
Enter running costs
Set the management fee percentage, then property tax and insurance as yearly amounts and repairs, HOA and utilities as monthly amounts.
Read the result and chart
The net monthly figure updates as you type; the steps list each subtraction, and the donut chart can be saved as PNG, SVG or CSV.

Examples

One house at $2,000 a month

Rented units: 1
Rent per unit: 2000
Other income (parking, laundry): 0
Vacancy and unpaid rent: 5
Management fee: 10
Property tax: 2400
Landlord insurance: 1200
Repairs and maintenance: 100
HOA or service charge: 0
Utilities the owner pays: 0

Result Net monthly rental income: $1,310.00
Gross scheduled rent: $2,000.00
Income actually collected: $1,900.00
Monthly operating expenses: $590.00
Net income per year: $15,720.00
Expense ratio: 31.1%

Gross scheduled rent = 1 x 2000 = 2000
Vacancy loss = 2000 x 5% = 100
Collected income = 2000 – 100 + 0 other = 1900
Management = 1900 x 10% = 190
Expenses = 190 + tax 200 + insurance 100 + maintenance 100 + HOA 0 + utilities 0 = 590
Net monthly income = 1900 – 590 = 1310

After a 5% vacancy allowance, a 10% manager and monthly shares of tax and insurance, about 65% of the listed rent reaches the owner.

Self-managed fourplex

Rented units: 4
Rent per unit: 1200
Other income (parking, laundry): 200
Vacancy and unpaid rent: 0
Management fee: 0
Property tax: 6000
Landlord insurance: 2400
Repairs and maintenance: 300
HOA or service charge: 0
Utilities the owner pays: 250

Result Net monthly rental income: $3,750.00
Gross scheduled rent: $4,800.00
Income actually collected: $5,000.00
Monthly operating expenses: $1,250.00
Net income per year: $45,000.00
Expense ratio: 25%

Gross scheduled rent = 4 x 1200 = 4800
Vacancy loss = 4800 x 0% = 0
Collected income = 4800 – 0 + 200 other = 5000
Management = 5000 x 0% = 0
Expenses = 0 + tax 500 + insurance 200 + maintenance 300 + HOA 0 + utilities 250 = 1250
Net monthly income = 5000 – 1250 = 3750

Four units at $1,200 plus $200 parking give $5,000; $1,250 of tax, insurance, repairs and water leaves $3,750, a 25% expense ratio.

How it is calculated

Net = (U × R) × (1 − V) + O − M × [(U × R) × (1 − V) + O] − T/12 − I/12 − P − H − W

U: number of rented units
R: monthly rent per unit
V: vacancy and unpaid-rent allowance as a fraction
O: other monthly income
M: management fee as a fraction of collected income
T, I: annual property tax and insurance
P, H, W: monthly repairs, HOA charge and owner-paid utilities

Gross scheduled rent is units times rent. The vacancy allowance is taken off that, and other income is added, giving the income actually collected. Managers usually bill on collected rent, so the fee percentage applies to that figure. Yearly bills are divided by twelve. What remains after all operating expenses is the net monthly rental income; the expense ratio is expenses divided by collected income.

Sources

Publication 527, Residential Rental Property — Internal Revenue Service
Topic no. 414, Rental income and expenses — Internal Revenue Service

When not to use it

It does not give taxable rental profit, since depreciation and income tax are not modelled.
It ignores financing, so it cannot show cash left after paying a lender.
Short-term holiday lets with nightly rates and cleaning fees need a per-night model instead.

Common mistakes

Entering annual property tax in a monthly box inflates costs twelvefold.
Setting vacancy to 0% for a property that turns over tenants every year.
Leaving out repairs because nothing has broken yet; budgets of 5–10% of rent are common.
Charging the management fee on listed rent when the contract bills on rent collected.

Frequently asked questions

What counts as rental income?

The IRS treats normal rent, advance rent, fees a tenant pays to break a lease and expenses a tenant pays on your behalf as rental income. This calculator covers the recurring part: monthly rent per unit plus regular extras such as parking, storage or laundry.

What vacancy rate is reasonable?

Many owners budget 5 to 8 percent, which is about 18 to 29 empty days a year. Student lets, rural areas and buildings with frequent turnover often need 10 percent or more; a long-standing tenant in a tight market may justify less.

What is a normal expense ratio for a rental?

Operating costs commonly take 35 to 50 percent of collected rent once management, repairs, tax and insurance are included. A ratio well under 30 percent often means a cost has been left out, such as capital repairs or a manager's leasing fee.

Is net rental income the same as NOI?

Close to it. Net operating income is collected income minus operating expenses, before financing and income tax, which is what this calculator returns. Some analysts also deduct a reserve for replacing roofs and appliances; enter that in the repairs box if you want it included.

Why is the management fee charged on collected income?

Most property management agreements take their percentage from rent actually received, so an empty unit costs the owner the rent but not the fee. If your contract charges on scheduled rent, the true fee is slightly higher than shown here.

Should utilities be included?

Only those the owner pays. In many multi-unit buildings the landlord covers water, sewer, trash or common-area electricity; enter the monthly total. Utilities metered to and paid by tenants do not belong here.