This rental property calculator turns a listing’s numbers into the ratios investors and lenders actually compare: net operating income, cap rate, monthly cash flow, cash-on-cash return, debt service coverage, gross rent multiplier, and gross yield. It’s free, needs no signup, and every calculation runs in your browser.
How to use this rental property calculator
- Purchase — enter the price, your down payment as a percentage, closing costs, and any repair or rehab money you’ll spend before the first tenant moves in.
- Loan — the interest rate and term of the mortgage. Set the down payment to 100% to model an all-cash purchase; the loan fields are then ignored.
- Income — the total monthly rent across all units and a vacancy allowance for months without rent or unpaid rent.
- Operating expenses — annual property tax, insurance, and maintenance, a management fee as a percentage of rent collected, monthly HOA dues, and anything else you pay as the owner.
- Read the results. The first-year table shows each step from gross rent down to cash flow, so you can see which line moves the answer. The address bar keeps your inputs, so the URL reopens the same scenario.
Cap rate ignores the loan; cash-on-cash doesn’t
Cap rate divides NOI by the price, and NOI stops before the mortgage. That makes it a measure of the property itself — two buyers paying the same price get the same cap rate whether one borrows 75% or pays cash. Cash-on-cash return is the opposite: it starts from cash flow after the loan payment and divides by the cash you put in, so financing changes it directly.
The example property shows how far apart they can land. Its cap rate is 6.66%, but with 25% down at 7.03% the cash-on-cash return is only 2.24%. Buy the same property for cash and cash-on-cash rises to 6.40% on $260,000 invested, while the cap rate doesn’t move. The reason is the price of the borrowed money: the loan’s annual payments are about 8.01% of the amount borrowed, more than the 6.66% the property earns on its price, so every borrowed dollar costs more than it brings in. The mortgage payment calculator shows how the payment moves with rate and term, and the amortization schedule calculator shows how much of each payment is interest rather than principal.
Reading DSCR, GRM and gross yield
DSCR (debt service coverage ratio) is the lender’s view: NOI divided by a year of loan payments. At 1.11, the example property’s NOI covers its payments with 11% to spare. Drop the rent to $2,100 and DSCR falls to 0.97 — income no longer covers the loan and monthly cash flow turns negative at −$35.26.
Gross rent multiplier and gross yield are quick screens that skip expenses entirely. GRM is the price divided by a year of rent (9.06 here); gross yield is the same fraction flipped (11.04%). Because they ignore taxes, insurance, and vacancy, two buildings with the same GRM can have very different cap rates, so they work for sorting listings, not for settling on one. GRM is sometimes quoted against monthly rent instead; that version is 12 times the annual figure shown here. Some guides also divide the rent by the total outlay, repairs and fees included, which gives a lower yield; Together Money, a UK lender, notes that this isn’t the standard way to calculate gross yield. This calculator divides by the price and counts the rest in cash-on-cash return.
The 1% and 50% rules of thumb
Two shortcuts circulate among landlords. The 1% rule says monthly rent should be at least 1% of the purchase price; Freedom Mortgage calls it “only a guideline” that ignores taxes and insurance. It’s the same test as a 12% gross yield — the example property’s $2,300 rent is 0.92% of its price, an 11.04% gross yield. The 50% rule assumes operating costs eat about half of gross rent; SmartAsset’s version counts vacancy but leaves out the mortgage, management fees, and HOA dues. On that basis the example’s vacancy, tax, insurance, maintenance, and other costs come to about 32% of gross rent, a reminder that the rule is a screen and your actual tax bill and insurance quote are better numbers.
Limits and tips
- The vacancy default is the Census Bureau’s latest national rental vacancy rate; the note under the field names the quarter. Your street, unit type, and tenant screening can put your figure well above or below it.
- The rate default is Freddie Mac’s weekly survey average, which follows home purchase loans on owner-occupied single-family homes. It does not track investment-property loans, so replace it with the rate a lender quotes for this property.
- There is no separate line for big-ticket replacements such as a roof or furnace. If you set money aside for them each year, add it to other costs.
- The loan is modeled as fixed-rate and fully amortizing. For a planned refinance, the refinance break-even calculator shows how long closing costs take to pay back.
- Weighing a rental against buying your own home first? The mortgage affordability calculator applies the 28/36 debt-to-income rule to a home you would live in.
- To see what the same cash might grow to at a steady rate of return instead, the compound interest calculator projects it year by year.
Your numbers stay in your browser
The calculation runs entirely in your browser, and nothing you type is sent to us. Your inputs are kept in the page address (the part after the “?”), so a bookmark or a shared link reopens the same scenario, and anyone you send the link to sees the figures. Our analytics receives page addresses without that part, so your numbers don’t reach it. The privacy policy covers the details.