Skip to content

Rental Property Calculator

Real EstateRent and Tenancy
Purchase
Income

Parking, laundry, storage fees.

Operating expenses

Share of rent actually collected.

Utilities you pay, lawn care, pest control.

Monthly cash flow (all-cash purchase) —
Net operating income per year
—
Cap rate
—
Cash-on-cash return
—
Total cash invested
—
Gross rent multiplier
—
Monthly rent as % of price
—
Operating expense ratio
—
Where a year of collected rent goes
The chart appears with your result

Subtract vacancy and every running cost from a year of rent to get net operating income (NOI), then divide by the price for the cap rate. A $250,000 house renting at $2,200 a month, with 5% vacancy, 5% maintenance, an 8% manager, $3,000 tax, $1,500 insurance and $50 HOA, nets $16,653.60 a year: a 6.66% cap rate.

About this tool

Buy-and-hold investors, first-time landlords and people deciding whether to rent out a home they already own all face the same question: after the costs, what does this property actually earn? Enter the price, the one-off costs to get it rentable, the rent and the running expenses, and the calculator returns net operating income, monthly cash flow, cap rate, cash-on-cash return, gross rent multiplier and the expense ratio, plus a donut showing how each collected dollar is split. It models a cash purchase: financing costs are not included, so if you borrow, subtract your monthly debt payment from the cash flow figure yourself. Income tax and depreciation are also left out, because they depend on your own tax position.

How to use it

  1. Enter the purchase

    Type the price, closing costs and any repairs needed before the first tenant moves in. Together they make the cash invested.

  2. Set the income

    Enter monthly rent and any extra income such as parking, then drag the vacancy slider to the share of the year you expect the unit to sit empty.

  3. List the running costs

    Add yearly property tax and insurance, monthly HOA and other costs, and set maintenance and management as percentages of rent.

  4. Read the returns

    Monthly cash flow leads; NOI, cap rate, cash-on-cash and GRM follow, with the working shown line by line and a donut of where the rent goes.

Examples

$200,000 house renting for $2,000

Purchase price
200000
Closing costs
0
Repairs before renting
0
Monthly rent
2000
Other monthly income
0
Vacancy allowance
0
Property tax per year
3000
Insurance per year
1200
HOA fees per month
0
Maintenance, share of rent
0
Management fee
0
Other costs per month
0

Result Monthly cash flow (all-cash purchase): $1,650.00
Net operating income per year: $19,800.00
Cap rate: 9.9%
Cash-on-cash return: 9.9%
Total cash invested: $200,000.00
Gross rent multiplier: 8.33
Monthly rent as % of price: 1%
Operating expense ratio: 17.5%

  1. Gross scheduled income = ($2,000.00 + $0.00) × 12 = $24,000.00
  2. Vacancy loss = $24,000.00 × 0% = $0.00, so effective income = $24,000.00
  3. Operating expenses = tax $3,000.00 + insurance $1,200.00 + maintenance $0.00 + management $0.00 + HOA and other $0.00 = $4,200.00
  4. NOI = $24,000.00 − $4,200.00 = $19,800.00 a year, or $1,650.00 a month
  5. Cap rate = $19,800.00 ÷ $200,000.00 = 9.9%
  6. Cash-on-cash = $19,800.00 ÷ $200,000.00 = 9.9%

With only tax and insurance as costs, the house nets $19,800 a year, a 9.9% cap rate, and it just meets the 1% rule.

$250,000 rental with vacancy and management

Purchase price
250000
Closing costs
5000
Repairs before renting
10000
Monthly rent
2200
Other monthly income
0
Vacancy allowance
5
Property tax per year
3000
Insurance per year
1500
HOA fees per month
50
Maintenance, share of rent
5
Management fee
8
Other costs per month
0

Result Monthly cash flow (all-cash purchase): $1,387.80
Net operating income per year: $16,653.60
Cap rate: 6.66%
Cash-on-cash return: 6.28%
Total cash invested: $265,000.00
Gross rent multiplier: 9.47
Monthly rent as % of price: 0.88%
Operating expense ratio: 33.6%

  1. Gross scheduled income = ($2,200.00 + $0.00) × 12 = $26,400.00
  2. Vacancy loss = $26,400.00 × 5% = $1,320.00, so effective income = $25,080.00
  3. Operating expenses = tax $3,000.00 + insurance $1,500.00 + maintenance $1,320.00 + management $2,006.40 + HOA and other $600.00 = $8,426.40
  4. NOI = $25,080.00 − $8,426.40 = $16,653.60 a year, or $1,387.80 a month
  5. Cap rate = $16,653.60 ÷ $250,000.00 = 6.66%
  6. Cash-on-cash = $16,653.60 ÷ $265,000.00 = 6.28%

A 5% vacancy allowance, 5% maintenance and an 8% manager cut bring net income to $16,653.60 a year; spread over $265,000 of cash that is a 6.28% return.

High-tax property with low rent

Purchase price
100000
Closing costs
0
Repairs before renting
0
Monthly rent
500
Other monthly income
0
Vacancy allowance
0
Property tax per year
6000
Insurance per year
1000
HOA fees per month
0
Maintenance, share of rent
0
Management fee
0
Other costs per month
0

Result Monthly cash flow (all-cash purchase): -$83.33
Net operating income per year: -$1,000.00
Cap rate: -1%
Cash-on-cash return: -1%
Total cash invested: $100,000.00
Gross rent multiplier: 16.67
Monthly rent as % of price: 0.5%
Operating expense ratio: 116.7%

  1. Gross scheduled income = ($500.00 + $0.00) × 12 = $6,000.00
  2. Vacancy loss = $6,000.00 × 0% = $0.00, so effective income = $6,000.00
  3. Operating expenses = tax $6,000.00 + insurance $1,000.00 + maintenance $0.00 + management $0.00 + HOA and other $0.00 = $7,000.00
  4. NOI = $6,000.00 − $7,000.00 = -$1,000.00 a year, or -$83.33 a month
  5. Cap rate = -$1,000.00 ÷ $100,000.00 = -1%
  6. Cash-on-cash = -$1,000.00 ÷ $100,000.00 = -1%

Rent of $6,000 a year against $7,000 of tax and insurance leaves a $1,000 annual loss before any other cost.

How it is calculated

NOI = (rent + other income) × 12 × (1 − vacancy) − operating expenses; cap rate = NOI ÷ price; cash-on-cash = NOI ÷ (price + closing + repairs); GRM = price ÷ (rent × 12)

NOI
Net operating income, the yearly income left after vacancy and running costs
vacancy
Share of gross income lost to empty months and unpaid rent
operating expenses
Tax, insurance, HOA, other costs, maintenance (share of gross rent) and management (share of collected income)
GRM
Gross rent multiplier: years of gross rent needed to equal the price

This follows the income approach used by appraisers. Maintenance is taken on scheduled rent because repairs happen whether or not the unit is full, while management is taken on collected income because managers are normally paid on what they collect. Cash-on-cash uses NOI because the model assumes no borrowing; with financing, the numerator would be cash flow after debt service and the denominator only your own cash.

Sources

When not to use it

  • Do not use it for a financed purchase without subtracting your monthly debt payment from the cash flow.
  • It is not a tax estimate: depreciation and income tax on rental profit are excluded.
  • Short-term holiday lets with nightly pricing and cleaning fees need an occupancy-based model instead.

Common mistakes

  • Setting vacancy to 0% because the unit is let today, ignoring turnover between tenants.
  • Leaving out maintenance on a newer house; roofs, boilers and appliances still wear out.
  • Comparing a cap rate on purchase price with one quoted on current market value.
  • Counting the security deposit as income when it belongs to the tenant.

Frequently asked questions

What cap rate counts as good for a rental?

There is no single threshold. Cap rates move with location, property type and the wider market: a stable unit in an expensive city may trade around 4–5%, while an older property in a smaller market may need 8–10% to attract buyers. Compare the figure with recent sales of similar rentals nearby rather than a national rule.

Why is management charged on collected income but maintenance on full rent?

Property managers usually take a percentage of the rent they actually collect, so empty months cost them too. Repairs and wear do not stop when a unit is empty, so maintenance is budgeted against the full scheduled rent.

What is the 1% rule shown in the results?

It is a quick screening test: monthly rent should be at least 1% of the purchase price. A $200,000 house would need $2,000 a month. Meeting it does not make a deal good, and missing it does not make one bad, especially where tax and insurance are low or prices are high.

How much vacancy should I assume?

Many investors start with 5–8%, roughly two to four weeks empty a year, then adjust using local vacancy data and how long similar listings take to rent. A unit with frequent turnover, such as student housing, may justify a higher figure.

Why does cash-on-cash equal roughly the cap rate here?

Because the model assumes a cash purchase. NOI is divided by price for the cap rate and by price plus closing and repairs for cash-on-cash, so the two differ only by those one-off costs. With borrowing the two figures can diverge sharply.

What does the gross rent multiplier tell me?

GRM is the price divided by a year of gross rent. A GRM of 9.5 means the property costs nine and a half years of rent before any expense. It ignores costs completely, so use it only to compare similar properties quickly.