{"id":67389,"date":"2026-10-21T10:13:07","date_gmt":"2026-10-21T07:13:07","guid":{"rendered":"https:\/\/wpcalc.com\/en\/?p=67389"},"modified":"2026-10-21T10:13:07","modified_gmt":"2026-10-21T07:13:07","slug":"rental-property-calculator-cash-flow-and-roi","status":"publish","type":"post","link":"https:\/\/wpcalc.com\/en\/finance\/rental-property-calculator-cash-flow-and-roi\/","title":{"rendered":"Rental Property Calculator \u2013 Cash Flow and ROI"},"content":{"rendered":"<section class=\"not-prose calculator-box\" aria-labelledby=\"calculator-title\"><div class=\"flex items-baseline sm:items-center justify-between gap-2 sm:gap-3\"><div class=\"flex flex-col sm:flex-row sm:items-center gap-2\"><span class=\"icon icon-calculator text-primary-700! text-base! dark:text-primary-300!\" aria-hidden=\"true\"><\/span><h2 id=\"calculator-title\" class=\"text-lg font-display font-bold\">Analyze Cash Flow, Returns and the 1% Rule<\/h2><\/div><div class=\"calcdash-favorite group\">\n  <button type=\"button\" class=\"favorite\" id=\"favorite\" data-favorite-id=\"67389\" data-favorite-title=\"Rental Property\" data-favorite-url=\"https:\/\/wpcalc.com\/en\/finance\/rental-property-calculator-cash-flow-and-roi\/\" data-favorite-excerpt=\"Estimate the cash flow and return of a rental property. Enter the purchase price, financing, rent, expenses and growth assumptions to get NOI, cap rate, cash-on-cash return, DSCR, the 1% rule check, total profit over the hold and IRR.\" aria-label=\"Add to Favorites\" data-favorite-icon=\"icon icon-investment\">\n    <span class=\"icon icon-shape-star-empty\" aria-hidden=\"true\"><\/span>\n  <\/button>\n  <div class=\"calcdash-favorite__tip\" aria-hidden=\"true\">\n   <span class=\"favorite-tooltip\" id=\"favorite-tooltip\"><\/span>\n  <\/div>\n  <span class=\"sr-only\" role=\"status\" id=\"favorite-status\"><\/span>\n<\/div><\/div><form action=\"https:\/\/wpcalc.com\/en\/finance\/rental-property-calculator-cash-flow-and-roi\/\" method=\"POST\" class=\"calculator\" id=\"calculator-67389\" data-post=\"67389\"><fieldset class=\"fieldset-input is-2\"><legend class=\"sr-only\">Input Fields<\/legend><div class=\"is-single field\" id=\"input-1\"><span class=\"font-semibold\">Your purchase<\/span><\/div><div class=\"field\" id=\"input-2\"><label for=\"field-2\">Purchase price<\/label><input type=\"text\" name=\"purchase_price\" id=\"field-2\" aria-describedby=\"calc-unit-2\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"200000\"\/><div class=\"unit\" id=\"calc-unit-2\">$<\/div><\/div><div class=\"field\" id=\"input-3\"><label for=\"field-3\">Closing costs<\/label><input type=\"text\" name=\"closing_costs\" id=\"field-3\" aria-describedby=\"calc-unit-3\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"5000\"\/><div class=\"unit\" id=\"calc-unit-3\">$<\/div><\/div><div class=\"field\" id=\"input-4\"><label for=\"field-4\">Repair \/ renovation costs<\/label><input type=\"text\" name=\"repair_renovation_costs\" id=\"field-4\" aria-describedby=\"calc-unit-4 calc-info-4\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"8000\"\/><div class=\"unit\" id=\"calc-unit-4\">$<\/div><small id=\"calc-info-4\">Upfront work needed to make the unit rentable.<\/small><\/div><div class=\"field\" id=\"input-5\"><label for=\"field-5\">Down payment<\/label><input type=\"text\" name=\"down_payment\" id=\"field-5\" aria-describedby=\"calc-unit-5 calc-info-5\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"25\"\/><div class=\"unit\" id=\"calc-unit-5\">%<\/div><small id=\"calc-info-5\">100% = all-cash purchase, no mortgage.<\/small><\/div><div class=\"field\" id=\"input-6\"><label for=\"field-6\">Interest rate<\/label><input type=\"text\" name=\"interest_rate\" id=\"field-6\" aria-describedby=\"calc-unit-6 calc-info-6\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"30\" value=\"7\"\/><div class=\"unit\" id=\"calc-unit-6\">%<\/div><small id=\"calc-info-6\">Annual rate on the loan.<\/small><\/div><div class=\"field\" id=\"input-7\"><label for=\"field-7\">Loan term<\/label><input type=\"text\" name=\"loan_term\" id=\"field-7\" aria-describedby=\"calc-unit-7\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" max=\"40\" value=\"30\"\/><div class=\"unit\" id=\"calc-unit-7\">years<\/div><\/div><div class=\"is-single field\" id=\"input-8\"><span class=\"font-semibold\">Rental income<\/span><\/div><div class=\"field\" id=\"input-9\"><label for=\"field-9\">Monthly rent<\/label><input type=\"text\" name=\"monthly_rent\" id=\"field-9\" aria-describedby=\"calc-unit-9\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"2000\"\/><div class=\"unit\" id=\"calc-unit-9\">$\/mo<\/div><\/div><div class=\"field\" id=\"input-10\"><label for=\"field-10\">Other monthly income<\/label><input type=\"text\" name=\"other_monthly_income\" id=\"field-10\" aria-describedby=\"calc-unit-10 calc-info-10\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"0\"\/><div class=\"unit\" id=\"calc-unit-10\">$\/mo<\/div><small id=\"calc-info-10\">Laundry, parking, pet fees, late fees, etc.<\/small><\/div><div class=\"field\" id=\"input-11\"><label for=\"field-11\">Vacancy rate<\/label><input type=\"text\" name=\"vacancy_rate\" id=\"field-11\" aria-describedby=\"calc-unit-11 calc-info-11\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"99\" value=\"5\"\/><div class=\"unit\" id=\"calc-unit-11\">%<\/div><small id=\"calc-info-11\">Share of gross income lost to empty units and turnover \u2014 investors often assume 5\u201310%.<\/small><\/div><div class=\"is-single field\" id=\"input-12\"><span class=\"font-semibold\">Recurring expenses<\/span><\/div><div class=\"field\" id=\"input-13\"><label for=\"field-13\">Property taxes<\/label><input type=\"text\" name=\"property_taxes\" id=\"field-13\" aria-describedby=\"calc-unit-13\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"2400\"\/><div class=\"unit\" id=\"calc-unit-13\">$\/yr<\/div><\/div><div class=\"field\" id=\"input-14\"><label for=\"field-14\">Insurance<\/label><input type=\"text\" name=\"insurance\" id=\"field-14\" aria-describedby=\"calc-unit-14\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"1200\"\/><div class=\"unit\" id=\"calc-unit-14\">$\/yr<\/div><\/div><div class=\"field\" id=\"input-15\"><label for=\"field-15\">HOA fees<\/label><input type=\"text\" name=\"hoa_fees\" id=\"field-15\" aria-describedby=\"calc-unit-15 calc-info-15\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"0\"\/><div class=\"unit\" id=\"calc-unit-15\">$\/mo<\/div><small id=\"calc-info-15\">Enter 0 if the property has no association.<\/small><\/div><div class=\"field\" id=\"input-16\"><label for=\"field-16\">Maintenance<\/label><input type=\"text\" name=\"maintenance\" id=\"field-16\" aria-describedby=\"calc-unit-16 calc-info-16\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"5\"\/><div class=\"unit\" id=\"calc-unit-16\">%<\/div><small id=\"calc-info-16\">Percent of the monthly rent set aside for routine repairs.<\/small><\/div><div class=\"field\" id=\"input-17\"><label for=\"field-17\">Property management<\/label><input type=\"text\" name=\"property_management\" id=\"field-17\" aria-describedby=\"calc-unit-17 calc-info-17\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"8\"\/><div class=\"unit\" id=\"calc-unit-17\">%<\/div><small id=\"calc-info-17\">Percent of the monthly rent paid to a manager \u2014 enter 0 if you self-manage.<\/small><\/div><div class=\"field\" id=\"input-18\"><label for=\"field-18\">Capital expenditures<\/label><input type=\"text\" name=\"capital_expenditures\" id=\"field-18\" aria-describedby=\"calc-unit-18 calc-info-18\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"5\"\/><div class=\"unit\" id=\"calc-unit-18\">%<\/div><small id=\"calc-info-18\">Percent of the monthly rent for big-ticket items (roof, HVAC, appliances).<\/small><\/div><div class=\"is-single field\" id=\"input-19\"><span class=\"font-semibold\">Growth and your exit<\/span><\/div><div class=\"field\" id=\"input-20\"><label for=\"field-20\">Home appreciation<\/label><input type=\"number\" name=\"home_appreciation\" id=\"field-20\" aria-describedby=\"calc-unit-20\" min=\"-50\" max=\"100\" step=\"0.1\" value=\"3\"\/><div class=\"unit\" id=\"calc-unit-20\">%\/yr<\/div><\/div><div class=\"field\" id=\"input-21\"><label for=\"field-21\">Rent growth<\/label><input type=\"number\" name=\"rent_growth\" id=\"field-21\" aria-describedby=\"calc-unit-21 calc-info-21\" min=\"-50\" max=\"100\" step=\"0.1\" value=\"3\"\/><div class=\"unit\" id=\"calc-unit-21\">%\/yr<\/div><small id=\"calc-info-21\">Rent and the percentage-based expenses grow at this rate.<\/small><\/div><div class=\"field\" id=\"input-22\"><label for=\"field-22\">Holding period<\/label><input type=\"text\" name=\"holding_period\" id=\"field-22\" aria-describedby=\"calc-unit-22 calc-info-22\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" max=\"50\" value=\"10\"\/><div class=\"unit\" id=\"calc-unit-22\">years<\/div><small id=\"calc-info-22\">1 to 50 years \u2014 how long you keep the property before selling.<\/small><\/div><div class=\"field\" id=\"input-23\"><label for=\"field-23\">Selling costs<\/label><input type=\"text\" name=\"selling_costs\" id=\"field-23\" aria-describedby=\"calc-unit-23 calc-info-23\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"6\"\/><div class=\"unit\" id=\"calc-unit-23\">%<\/div><small id=\"calc-info-23\">Agent commissions and closing costs as a percent of the sale price.<\/small><\/div><\/fieldset><div class=\"buttons\"><button type=\"submit\" data-text=\"Re-Calculate\" id=\"calculate-button\" data-post=\"67389\">Calculate<\/button><button type=\"reset\">Reset<\/button><\/div><div class=\"field is-checkbox hidden!\" id=\"field-auto-calc\"><input type=\"checkbox\" id=\"auto-calc\"><label for=\"auto-calc\">Calculate automatically<\/label><small>If enabled, the result will update automatically when you change any value.<\/small><\/div><div class=\"fieldset-result is-hidden\" aria-labelledby=\"result-title\" aria-live=\"polite\" role=\"region\"> <h3 class=\"result-title bg-gradient-to-r from-primary-50 to-gray-50 dark:from-primary-900 dark:to-gray-800\" id=\"result-title\"><span class=\"icon icon-s-pulse\" aria-hidden=\"true\"><\/span> Your Rental Property Analysis<\/h3><div class=\"result-box\"><div class=\"field-result is-column\" id=\"output-1\"><span class=\"field-title\"><span>Deal summary<\/span><\/span><span class=\"field-value\" id=\"result-1\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-2\"><span class=\"field-title\"><span>Monthly mortgage payment<\/span><\/span><span class=\"field-value\" id=\"result-2\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-3\"><span class=\"field-title\"><span>Monthly cash flow<\/span><\/span><span class=\"field-value\" id=\"result-3\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-4\"><span class=\"field-title\"><span>Annual cash flow (year 1)<\/span><\/span><span class=\"field-value\" id=\"result-4\" data-unit=\"$\/yr\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-5\"><span class=\"field-title\"><span>Net operating income (NOI, year 1)<\/span><\/span><span class=\"field-value\" id=\"result-5\" data-unit=\"$\/yr\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-6\"><span class=\"field-title\"><span>Cap rate<\/span><\/span><span class=\"field-value\" id=\"result-6\" data-unit=\"%\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-7\"><span class=\"field-title\"><span>Cash-on-cash return (year 1)<\/span><\/span><span class=\"field-value\" id=\"result-7\" data-unit=\"%\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-8\"><span class=\"field-title\"><span>The 1% rule check<\/span><\/span><span class=\"field-value\" id=\"result-8\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-9\"><span class=\"field-title\"><span>DSCR (debt service coverage ratio)<\/span><\/span><span class=\"field-value\" id=\"result-9\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-10\"><span class=\"field-title\"><span>Total cash flow over the hold<\/span><\/span><span class=\"field-value\" id=\"result-10\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-11\"><span class=\"field-title\"><span>Equity at sale<\/span><\/span><span class=\"field-value\" id=\"result-11\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-12\"><span class=\"field-title\"><span>Sale proceeds (after loan and costs)<\/span><\/span><span class=\"field-value\" id=\"result-12\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-13\"><span class=\"field-title\"><span>Total profit<\/span><\/span><span class=\"field-value\" id=\"result-13\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-14\"><span class=\"field-title\"><span>Annualized return (IRR)<\/span><\/span><span class=\"field-value\" id=\"result-14\" data-unit=\"%\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-15\"><span class=\"field-title\"><span>Year-by-year breakdown<\/span><\/span><span class=\"field-value\" id=\"result-15\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><\/div><div class=\"result-actions\"><button type=\"button\" class=\"copy-link\"><svg viewBox=\"0 0 20 20\" fill=\"currentColor\" aria-hidden=\"true\"><path d=\"M12.232 4.232a2.5 2.5 0 0 1 3.536 3.536l-1.225 1.224a.75.75 0 0 0 1.061 1.06l1.224-1.224a4 4 0 0 0-5.656-5.656l-3 3a4 4 0 0 0 .225 5.865.75.75 0 0 0 .977-1.138 2.5 2.5 0 0 1-.142-3.667l3-3Z\"\/><path d=\"M11.603 7.963a.75.75 0 0 0-.977 1.138 2.5 2.5 0 0 1 .142 3.667l-3 3a2.5 2.5 0 0 1-3.536-3.536l1.225-1.224a.75.75 0 0 0-1.061-1.06l-1.224 1.224a4 4 0 1 0 5.656 5.656l3-3a4 4 0 0 0-.225-5.865Z\"\/><\/svg><span class=\"copy-link__text\">Copy link to this calculation<\/span><\/button><span class=\"sr-only\" role=\"status\" id=\"copy-link-status\"><\/span><\/div><\/div><a href=\"#respond\" class=\"hidden transition-opacity duration-300 opacity-0 w-50 text-sm justify-center items-center gap-2 px-4 py-2 rounded bg-gray-200 text-gray-700 hover:bg-gray-300\" id=\"leave-comment\"><span class=\"icon icon-comments\" aria-hidden=\"true\"><\/span>Leave a Comment<\/a><\/form><\/section><section id=\"calc-reactions\" class=\"not-prose hidden my-12 bg-gradient-to-r from-primary-50 to-gray-50 border border-indigo-100 rounded-xl px-6 py-4 shadow-sm\" data-post=\"67389\" aria-live=\"polite\" aria-labelledby=\"calc-reactions-title\"><p id=\"calc-reactions-title\" class=\"text-sm text-gray-500 text-center mb-2\">How did this result make you feel?<\/p><div role=\"group\" aria-labelledby=\"calc-reactions-title\" class=\"grid grid-cols-3 sm:flex sm:flex-row sm:justify-around gap-4 sm:items-center sm:flex-wrap\"><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"like\"><span class=\"reaction-count\" data-reaction-count=\"like\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude00 <\/span><span class=\"reaction-description font-medium\">Like <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"helpful\"><span class=\"reaction-count\" data-reaction-count=\"helpful\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\udca1 <\/span><span class=\"reaction-description font-medium\">Helpful <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"confused\"><span class=\"reaction-count\" data-reaction-count=\"confused\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude15 <\/span><span class=\"reaction-description font-medium\">Confused <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"disappointed\"><span class=\"reaction-count\" data-reaction-count=\"disappointed\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude1e <\/span><span class=\"reaction-description font-medium\">Disappointed <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"inaccurate\"><span class=\"reaction-count\" data-reaction-count=\"inaccurate\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\u274c <\/span><span class=\"reaction-description font-medium\">Inaccurate <\/span><\/button><\/div><div id=\"reaction-message\" class=\"hidden mt-8 rounded-md border border-primary-100 bg-white\/50 backdrop-blur-sm px-4 py-2 text-sm text-center shadow-sm\"><\/div><\/section><div class=\"calcdash-ad not-prose calcdash-ad--calc_result calcdash-ad--in-article\"><ins class=\"adsbygoogle\" style=\"display:block\" data-ad-client=\"ca-pub-1721569815777345\" data-ad-slot=\"6317458308\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\"><\/ins><script>(adsbygoogle = window.adsbygoogle || []).push({});<\/script><\/div>\n<style id=\"wpcoderpro-inline-1\">.formula-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section class=\"formula-box\" aria-labelledby=\"formula-title\">\r\n\t<div id=\"formula-title\" class=\"not-prose font-display mb-4\"><span class=\"icon icon-formula\" aria-hidden=\"true\"><\/span><h2>Rental Property Formula<\/h2><\/div>\r\n\t<figure class=\"not-prose formula\">\r\n\t\t<figcaption class=\"formula-title\">Formula<\/figcaption>\r\n\t\t<div class=\"text-base text-gray-800\" id=\"formula\">\n\\[ P = L\\,\\frac{i\\,(1+i)^n}{(1+i)^n - 1} \\\\ \\text{NOI} = \\Big[(R + O)(1-v) - \\tfrac{T}{12} - \\tfrac{I}{12} - H - R\\,(m_q + m_g + m_c)\\Big] \\times 12 \\\\ \\text{CF} = \\text{NOI} - 12P \\\\ \\text{Cap rate} = \\frac{\\text{NOI}}{C}, \\quad \\text{Cash-on-cash} = \\frac{\\text{CF}}{K}, \\quad \\text{DSCR} = \\frac{\\text{NOI}}{12P} \\\\ \\text{Cash invested } K = \\text{down payment} + \\text{closing costs} + \\text{repairs} \\\\ \\text{Profit} = \\sum \\text{CF} + \\text{sale price} \\times (1-s) - \\text{loan balance} - K \\]\n<\/div>\r\n\t<\/figure>\r\n\t<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>\\(L\\) \u2014 loan amount (purchase price minus down payment)<\/li>\n<li>\\(i\\) \u2014 monthly interest rate, \\(n\\) \u2014 total number of monthly payments<\/li>\n<li>\\(P\\) \u2014 monthly mortgage payment, \\(\\text{CF}\\) \u2014 annual cash flow<\/li>\n<li>\\(R\\) \u2014 monthly rent, \\(O\\) \u2014 other monthly income, \\(v\\) \u2014 vacancy rate (as a decimal)<\/li>\n<li>\\(T\\) \u2014 annual property taxes, \\(I\\) \u2014 annual insurance, \\(H\\) \u2014 monthly HOA fees<\/li>\n<li>\\(m_q, m_g, m_c\\) \u2014 maintenance, management and CapEx as a decimal share of the monthly rent<\/li>\n<li>\\(C\\) \u2014 purchase price, \\(K\\) \u2014 total cash invested, \\(s\\) \u2014 selling costs (agent fees, closing) as a decimal<\/li>\n<\/ul>\n<p>The first line is the standard amortizing-payment formula; the second computes net operating income (rent plus other income, reduced by vacancy, minus operating expenses \u2014 the mortgage is not an operating expense). Cash flow subtracts debt service, and the ratios compare income to price, to your own cash and to the loan payments. Total profit adds up every year's cash flow plus the net proceeds from selling at the end of the hold.<\/p>\n<p>\r\n<\/section>\n<style id=\"wpcoderpro-inline-459\">.calculation-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section id=\"calculation\" class=\"calculation-box\" aria-labelledby=\"calculation-title\">\r\n\t<div id=\"calculation-title\" class=\"not-prose font-display\"><span class=\"icon icon-unordered-list\" aria-hidden=\"true\"><\/span><h2>Rental Property \u2013 Calculation Example<\/h2><\/div>\r\n\r\n<\/p>\n<p><strong>Example:<\/strong> a $200,000 property bought with 25% down and a 7%, 30-year mortgage, plus $5,000 closing costs and $8,000 of repairs. It rents for $2,000 per month with 5% vacancy; expenses are $2,400\/yr in taxes, $1,200\/yr in insurance, no HOA, and 18% of rent for maintenance, management and CapEx (5% + 8% + 5%). Held 10 years with 3% appreciation, 3% rent growth and 6% selling costs.<\/p>\n<p>\\[ L = 200{,}000 \\times 0.75 = 150{,}000 \\;\\Rightarrow\\; P = 150{,}000 \\times \\frac{0.0058333 \\times 1.0058333^{360}}{1.0058333^{360} - 1} = 997.95 \\text{ per month} \\]<\/p>\n<p>\\[ K = 50{,}000 + 5{,}000 + 8{,}000 = 63{,}000 \\]<\/p>\n<p>\\[ \\text{NOI} = \\big[2{,}000 \\times 0.95 - 200 - 100 - 0 - 360\\big] \\times 12 = 1{,}240 \\times 12 = 14{,}880 \\]<\/p>\n<p>\\[ \\text{CF} = 14{,}880 - 12 \\times 997.95 = 2{,}905 \\text{ per year} \\approx 242 \\text{ per month} \\]<\/p>\n<p><strong>Result:<\/strong> cap rate = 14,880 \/ 200,000 = 7.44%; cash-on-cash = 2,905 \/ 63,000 = 4.61%; DSCR = 14,880 \/ 11,975 = 1.24. The $2,000 rent is exactly 1.00% of the price, so the deal just passes the 1% rule. Over 10 years the property grows to about $268,800, leaving roughly $123,900 in sale proceeds after the loan and selling costs; adding about $56,200 of accumulated cash flow gives a total profit of about $117,000 \u2014 an IRR of roughly 13.2% on your $63,000.<\/p>\n<p>\n\r\n<\/section>\n<h2>How to use the Rental Property Calculator<\/h2>\n<ol>\n<li>Under <strong>Your purchase<\/strong>, enter the <strong>Purchase price<\/strong>, <strong>Closing costs<\/strong> (see the <a href=\"https:\/\/wpcalc.com\/en\/finance\/closing-cost-calculator\/\">Closing Costs Calculator<\/a> for realistic numbers) and any <strong>Repair \/ renovation costs<\/strong> needed to make the unit rentable.<\/li>\n<li>Enter your financing: <strong>Down payment<\/strong> as a percent of the price (enter 100 for an all-cash buy), the annual <strong>Interest rate<\/strong> and the <strong>Loan term<\/strong> in years.<\/li>\n<li>Under <strong>Rental income<\/strong>, fill in the <strong>Monthly rent<\/strong>, <strong>Other monthly income<\/strong> (laundry, parking, pet fees) and a <strong>Vacancy rate<\/strong> \u2014 5\u201310% is a common assumption.<\/li>\n<li>List your <strong>Recurring expenses<\/strong>: annual <strong>Property taxes<\/strong> (estimate them with the <a href=\"https:\/\/wpcalc.com\/en\/finance\/property-tax-calculator\/\">Property Tax Calculator<\/a>) and <strong>Insurance<\/strong>, monthly <strong>HOA fees<\/strong>, and the percentages of rent for <strong>Maintenance<\/strong>, <strong>Property management<\/strong> and <strong>Capital expenditures<\/strong>. Enter 0 for management if you self-manage.<\/li>\n<li>Set your <strong>Growth and exit<\/strong> assumptions: <strong>Home appreciation<\/strong>, <strong>Rent growth<\/strong>, the <strong>Holding period<\/strong> and <strong>Selling costs<\/strong> as a percent of the sale price.<\/li>\n<li>Read the results: the deal summary, the 1% rule check, the long-hold metrics with IRR, and the year-by-year table showing value, rent, NOI, cash flow, loan balance and equity.<\/li>\n<\/ol>\n<h2>What this calculator measures<\/h2>\n<p>The calculator answers the two questions every investor asks before buying: <em>does the property pay me each month?<\/em> and <em>what total return do I get over the hold?<\/em> The monthly answer is cash flow \u2014 what is left of the rent after vacancy, operating expenses and the mortgage. A positive cash flow means the tenant effectively pays down your loan; a negative one means you subsidize the property out of pocket.<\/p>\n<p>Net operating income (NOI) strips out the mortgage on purpose: it shows the property's earning power from operations alone, so it can be compared across deals regardless of how each one is financed. Dividing NOI by the purchase price gives the <strong>cap rate<\/strong>, the standard yardstick for income properties. Dividing annual cash flow by the cash you put in gives the <strong>cash-on-cash return<\/strong> \u2014 what your down payment and closing costs actually earn you in year 1. To compare an unleveraged property with other assets, use the companion <a href=\"https:\/\/wpcalc.com\/en\/finance\/cap-rate-calculator-capitalization-rate\/\">Cap Rate Calculator<\/a>.<\/p>\n<p>The <strong>DSCR<\/strong> (debt service coverage ratio) divides NOI by the annual mortgage payments. Lenders typically want at least 1.2, meaning the property earns 20% more than it costs to service the debt \u2014 below that, the loan is riskier and may be harder to get. The <strong>1% rule<\/strong> is a quicker screen: monthly rent should be at least 1% of the purchase price. It ignores financing entirely, so treat it as a first filter, not a verdict \u2014 a deal can fail the rule yet produce solid cash flow with a big down payment, or pass it and still bleed money through taxes and HOA fees.<\/p>\n<p>For the long view, the calculator simulates every year of the hold with growing rent and appreciation, then reports total profit and the <strong>IRR<\/strong> \u2014 the annualized rate that makes all those yearly cash flows (money in at purchase, cash flow each year, sale proceeds at the end) add up to zero. IRR is the most honest single number for a hold, because it accounts for both when money arrives and how much of your own cash is tied up. Keep an eye on the <strong>equity<\/strong> column too: it combines price appreciation with the principal your tenants pay off, which you can track in more detail with the <a href=\"https:\/\/wpcalc.com\/en\/finance\/home-equity-calculator\/\">Home Equity Calculator<\/a>.<\/p>\n<h2>Assumptions and limitations<\/h2>\n<ul>\n<li>Property taxes, insurance and HOA fees are held <strong>constant<\/strong> over the hold; in reality taxes often reset after a sale and premiums rise, so re-run the numbers with higher values to stress-test the deal.<\/li>\n<li>Rent, other income and the percentage-based expenses (maintenance, management, CapEx) all grow at the <strong>rent growth rate<\/strong> you enter.<\/li>\n<li><strong>Income taxes are not modeled.<\/strong> Depreciation, mortgage interest deductions and capital gains tax on the sale can change your after-tax result significantly \u2014 consult a tax professional for that layer.<\/li>\n<li>No vacancy between tenants is modeled beyond the flat vacancy rate, and there is no allowance for leasing fees, tenant turnover costs or evictions.<\/li>\n<li>The IRR assumes cash flows arrive once a year (a slight simplification of monthly reality) and that the property sells at the end of the holding period at the appreciated value minus your selling costs.<\/li>\n<li>Use conservative inputs: a higher vacancy (8\u201310%), maintenance (8\u201310% of rent) and CapEx reserve is a safer planning basis than the most optimistic values, and a deal that only works at 0% vacancy is not a deal.<\/li>\n<li>Whether renting out a property beats owning your own home comes down to local numbers \u2014 the <a href=\"https:\/\/wpcalc.com\/en\/finance\/rent-vs-buy-calculator\/\">Rent vs Buy Calculator<\/a> covers the owner-occupant side of that comparison.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Estimate the cash flow and return of a rental property. Enter the purchase price, financing, rent, expenses and growth assumptions to get NOI, cap rate, cash-on-cash return, DSCR, the 1% rule check, total profit over the hold and IRR.<\/p>\n","protected":false},"author":3168,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[27],"class_list":["post-67389","post","type-post","status-publish","format-standard","hentry","category-finance","tag-investment"],"acf":[],"_links":{"self":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/users\/3168"}],"replies":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/comments?post=67389"}],"version-history":[{"count":1,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67389\/revisions"}],"predecessor-version":[{"id":67390,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67389\/revisions\/67390"}],"wp:attachment":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/media?parent=67389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/categories?post=67389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/tags?post=67389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}