Free rental planning tool
Rental property calculator
Work through a rental purchase: the loan, the rent, monthly and annual expenses, then cash flow, cap rate, cash-on-cash return and price per square foot.
How this calculation works
The loan amount is the purchase price less the down payment, and the payment covers principal and interest only. Net operating income is collected income less operating costs, before the mortgage. Cap rate divides a year of NOI by the purchase price. Cash-on-cash divides a year of cash flow by the down payment, closing costs and repair costs. The gross rent multiplier divides the price by a year of gross income. Debt coverage is NOI divided by debt service. A lender may define qualifying income and debt differently; this calculation does not determine loan eligibility.
Assumptions to review
Stress-test lower rent, additional vacancy, and higher repair costs. Do not treat a positive estimate as evidence that a specific property is a suitable investment.
Build and review one rental purchase scenario
Keep acquisition cash identifiable. Enter the property price separately from closing costs and initial repair work. Use a lender's quoted rate, term and down payment for the financing scenario. This tool calculates the loan as price less down payment; it does not add financed closing costs or renovation borrowing. Cash-on-cash return uses the down payment, closing costs and initial repair costs entered here.
Separate initial work from ongoing bills. The optional repair-cost field records work before renting; monthly maintenance and repairs represent recurring operating allowances. Enter taxes and insurance as annual amounts in their labeled fields. The management percentage applies to income after vacancy, and the flat fee is added to it. Enter both only when that reflects the arrangement you are comparing. The vacancy allowance here reduces both rent and other income.
Read the result with the remaining budget. Annual cash flow subtracts the modeled loan payments from annual operating income. It is before income taxes and does not set aside a separate capital reserve or include every future major project. Plan those costs and acquisition funding separately. Try lower rent, more vacancy and higher bills, and keep the assumptions with the result. A ratio or positive cash-flow figure does not establish a suitable purchase or a loan approval.