Rental Property Calculator
Investment Scenario
Financial Summary
| Monthly Mortgage P&I | — |
|---|---|
| Net Operating Income (NOI) | — |
| Monthly Net Cash Flow | — |
| Capitalization Rate (Cap Rate) | — |
| Cash-on-Cash Return (CoC) | — |
How to Use This Rental Property Calculator
A listing agent shows you gross rent; your lender cares about what is left after expenses and the mortgage. I use this layout on every deal screen: income, operating costs, financing, then the three numbers that matter—NOI, monthly cash flow, cap rate, and cash-on-cash return. Plug in your scenario before you write the offer.
- Enter purchase price and down payment. Down payment is the cash invested for cash-on-cash return.
- Set mortgage rate and term. These determine monthly P&I debt service.
- Enter monthly gross rent and operating expenses. Operating costs include taxes, insurance, HOA, management, and maintenance—exclude the mortgage.
- Press Calculate. Review mortgage P&I, NOI, monthly net cash flow, cap rate, and cash-on-cash return.
For unlevered NOI and cap rate only, use the Real Estate Calculator. To stress-test personal DTI with a new loan, check the Debt-to-Income Ratio Calculator.
Rental Property Formulas and Practical Applications
Rental investing is two stories stacked together: how the building performs (NOI and cap rate) and how your cash performs after leverage (cash flow and cash-on-cash). A property can look great on cap rate yet bleed cash if the loan payment eats the spread.
Net Operating Income and cap rate
NOI = (Monthly Rent − Monthly Operating Expenses) × 12
Cap Rate = NOI / Purchase Price × 100
At $2,500/month rent, $800/month expenses, and a $300,000 price: NOI is $20,400/year and cap rate is 6.8%.
Cash flow and cash-on-cash return
Monthly Cash Flow = Rent − Operating Expenses − Mortgage P&I
Cash-on-Cash Return = (Monthly Cash Flow × 12) / Down Payment × 100
If P&I is $1,520/month on the deal above, monthly cash flow is about $180. With $60,000 down, cash-on-cash return is roughly 3.6%—below the cap rate because leverage cuts both ways.
When cash flow turns negative
Positive NOI with negative cash flow usually means the loan payment is too large relative to income—a common outcome on low cap-rate markets or minimal down payments. In my experience, underwriting a vacancy buffer inside operating expenses (for example, budgeting 5–10% of rent) before you buy prevents surprises in the first vacant month.
Frequently Asked Questions
What is cash-on-cash return on a rental property?
Cash-on-cash return equals annual net cash flow divided by cash invested (typically the down payment), expressed as a percentage. It shows how hard your out-of-pocket dollars are working.
What is the difference between cap rate and cash-on-cash return?
Cap rate ignores financing and uses NOI divided by purchase price. Cash-on-cash return subtracts mortgage P&I from cash flow and divides by the cash you put in, capturing leverage effects.
What counts as operating expenses in this calculator?
Monthly operating expenses include taxes, insurance, HOA, property management, and maintenance—exclude mortgage principal and interest, which are modeled separately as debt service.
Can a rental property have positive NOI but negative cash flow?
Yes. Heavy leverage or a large mortgage payment can make monthly cash flow negative even when NOI is positive. This calculator shows both metrics side by side.
Does this calculator include vacancy or capital expenditures?
No. Enter realistic operating expenses that reflect vacancy and maintenance reserves if you want those baked in. The tool does not apply a separate vacancy line automatically.