Rental property calculator
A full deal worksheet. Enter the purchase, the loan, the rent and each running cost to see monthly cash flow alongside the four ratios investors check most.
Monthly cash flow
$458.07
Positive after every expense and allowance entered.
- Rent
- $2,800
- Vacancy allowance
- − $140
- Tax, insurance and HOA
- − $425
- Repairs, management, reserves
- − $280
- Mortgage payment
- − $1,496.93
- Yearly cash flow
- $5,497
- Cap rate
- 7.82%
- Cash-on-cash return
- 6.11%
- DSCR
- 1.31
- Rent as a share of price
- 0.93% below the 1% rule
How it is calculated
Monthly cash flow = Collected rent − Operating expenses − Mortgage payment
- Collected rent
- Monthly rent reduced by the share of the year you expect the unit to sit empty.
- Operating expenses
- Property tax, insurance, HOA dues, plus allowances for repairs, management and large replacements such as a roof or furnace.
- Mortgage payment
- Monthly principal and interest on the loan.
Worked example
- A $300,000 house is bought with 25% down at 7% over 30 years. The payment is $1,496.93 a month.
- Rent is $2,800. A 5% vacancy allowance takes $140, leaving $2,660 collected.
- Property tax is $300 a month and insurance $125. Setting aside 5% of rent for repairs and 5% for large replacements adds $280. Operating expenses total $705.
- $2,660 − $705 − $1,496.93 = $458.07 monthly cash flow, or about $5,497 a year.
Reading the results
Start with monthly cash flow. A property that loses money every month needs appreciation to rescue it, and that is a bet, not a plan. Many investors want a cushion of at least $100 to $200 per unit after every expense and reserve.
Be honest about the allowances. New investors often leave out vacancy, repairs and large replacements because no bill arrives for them in a normal month. They arrive eventually, and a worksheet without them shows a profit that will not appear in your bank account.
The 1% rule shown in the results is a quick screen: monthly rent of at least 1% of the price suggests a deal is worth a closer look. It is a filter for sorting listings and does not replace the full calculation.
Common questions
How much should I budget for repairs and maintenance?
A common starting point is 5% to 10% of rent for routine repairs, and a similar amount set aside for large replacements such as roofs, furnaces and appliances. Older properties need more.
What vacancy rate should I use?
Many investors use 5% to 8%, which is roughly two to four weeks empty each year. Use a higher figure in markets with heavy turnover or seasonal demand.
Should I include property management if I manage it myself?
Including it gives a truer picture. Managers typically charge 8% to 10% of collected rent. If the deal only works when your own time is free, it will stop working when you hire help.
What is the 1% rule?
A screening shortcut that says monthly rent should be at least 1% of the purchase price. A $200,000 property would need to rent for $2,000 a month. Many markets no longer meet it, so treat it as a rough filter.