Rental Property Calculator

Q: What is a good cash-on-cash return for a rental property?

A good cash-on-cash (CoC) return is subjective, but many real estate investors aim for a CoC return between 8% and 12%. Returns can vary significantly based on location, property type, and financing. A higher CoC return generally indicates a more profitable investment relative to the cash invested.

Q: What is a cap rate and what is a good one?

The capitalization rate (cap rate) is a measure of a rental property's profitability, calculated as Net Operating Income (NOI) divided by the property's market value. A 'good' cap rate typically falls between 4% and 10%, but this depends heavily on the market. A higher cap rate often implies higher potential returns but may also come with higher risk.

Q: What expenses should I include when analyzing a rental property?

When analyzing a rental property, you should include all operating expenses. This includes property taxes, insurance, maintenance and repairs, property management fees, vacancy costs (potential lost rent), utilities (if not paid by the tenant), HOA fees, and capital expenditures (CapEx) for large future repairs like a new roof or HVAC system.

Q: What is Net Operating Income (NOI)?

Net Operating Income (NOI) is a property's total income minus all operating expenses. It does not include mortgage payments (debt service), depreciation, or income taxes. The formula is: NOI = (Gross Rental Income + Other Income) - (Operating Expenses). Our calculator uses NOI to calculate the Cap Rate.

A free tool to analyze the profitability and return on your next real estate investment.

Purchase & Loan Information

Purchase Price

Down Payment

Loan Term (Years) Interest Rate

Closing Costs

Income

Monthly Rent

Monthly Operating Expenses

Property Taxes (/year)

Insurance (/year)

Maintenance (/year)

Vacancy Rate

Management Fees

Other Expenses (/mo)

How to Analyze a Rental Property Investment in 2025

Investing in rental properties is a proven strategy for building long-term wealth and generating passive income. However, a successful investment hinges on accurate analysis. A property that seems profitable on the surface can become a financial burden if you underestimate expenses or miscalculate returns. This rental property calculator is designed to provide a clear financial snapshot, helping you analyze any deal with confidence by focusing on the metrics that successful investors use every day.

How to Use This Rental Property Calculator

Get a complete financial analysis in four simple steps:

Enter Purchase and Loan Details: Start with the property's purchase price, your down payment, loan term, and interest rate. Don't forget to include estimated closing costs.
Add Income: Input the gross monthly rent you expect to collect.
Input All Operating Expenses: This is a critical step. Add annual figures for property taxes, insurance, and maintenance. Then, add percentage-based costs like vacancy rate and management fees. Finally, add any other fixed monthly costs like HOA dues or utilities.
Click "Analyze Property": Instantly see your results, including cash flow, CoC return, cap rate, and a visual breakdown of your monthly expenses.

Understanding the Key Investment Metrics

Our calculator simplifies complex financial analysis into three critical performance indicators:

Monthly Cash Flow: This is the profit left in your pocket each month after collecting rent and paying all expenses, including the mortgage. Consistently positive cash flow is the foundation of a healthy rental investment.
Cash-on-Cash (CoC) Return: This metric reveals the annual return you earn on the actual cash you invested (down payment plus closing costs). It's the most effective way to compare the performance of different properties and understand how efficiently your money is working for you. A higher CoC return is generally better.
Capitalization (Cap) Rate: This ratio measures the property's potential return by comparing its Net Operating Income (NOI) to its purchase price. The cap rate allows you to evaluate a property's profitability independent of financing, making it ideal for comparing different investment opportunities on an equal footing.

Before you analyze a specific property, it's crucial to understand your financing options. You can explore different loan scenarios with our Mortgage Calculator or determine your budget with the House Affordability Calculator.

Frequently Asked Questions

What is a good cash-on-cash return for a rental property?

While subjective, many investors target a cash-on-cash (CoC) return between 8% and 12%. However, this can fluctuate greatly based on the market, property type, and your financing structure. A higher CoC return signifies a more profitable investment relative to your initial cash outlay.

What is a cap rate and what is a good one?

The capitalization rate (cap rate) is a key profitability metric calculated by dividing the Net Operating Income (NOI) by the property's market value. A "good" cap rate typically falls between 4% and 10%, but this is highly dependent on the location and asset class. A higher cap rate can indicate higher potential returns but may also signal higher risk.

What expenses should I include when analyzing a rental property?

A thorough analysis must include all operating expenses. Key costs are property taxes, insurance, routine maintenance, and major repairs (Capital Expenditures or CapEx). You should also budget for property management fees (even if self-managing, to account for your time), potential vacancy periods, and any recurring costs like HOA fees or utilities not paid by the tenant.

What is Net Operating Income (NOI)?

Net Operating Income (NOI) is the property's total income after subtracting all operating expenses. Crucially, NOI does not include mortgage payments (principal and interest), income taxes, or depreciation. It provides a pure measure of a property's ability to generate profit from its operations and is used to calculate the cap rate.