Rental Property Calculator

About the Rental Property Calculator

This tool is designed for real estate investors to analyze the potential profitability of a rental property. By inputting various financial details, you can calculate the most important metrics for evaluating an investment property.

How It Works

The calculator takes into account the full financial picture of a potential investment:

• Purchase & Loan: This section covers the acquisition costs, including the purchase price, closing costs, upfront repairs, and your financing details (down payment, interest rate, loan term).
• Income: Enter the gross monthly rent you expect to collect, plus any other regular income from the property (e.g., laundry, parking fees).
• Operating Expenses: A detailed breakdown of the costs to run the property. This includes property taxes, insurance, HOA fees, and percentage-based estimates for vacancy, repairs, capital expenditures (CapEx), and property management.

Key Performance Metrics

The calculator provides a summary with three crucial metrics:

• Cash Flow: This is the net profit you make each month (or year) after all expenses, including your mortgage, have been paid. Positive cash flow is the primary goal for many buy-and-hold investors.
• Capitalization Rate (Cap Rate): Calculated as (Net Operating Income / Purchase Price) * 100, the cap rate measures the property's unlevered rate of return. It's a quick way to compare the potential profitability of different properties, independent of financing.
• Cash-on-Cash (CoC) Return: Calculated as (Annual Cash Flow / Total Cash Needed) * 100, this metric tells you the return you are getting on the actual cash you invested. It's one of the most important metrics because it measures the performance of your invested capital.

Use this calculator to run different scenarios and make an informed decision about your next real estate investment.