How is cap rate calculated?

Annual NOI before debt service (effective gross rent minus operating expenses in this model) divided by purchase price, expressed as a percentage.

Debt service coverage ratio—here, monthly NOI divided by the mortgage payment. Lenders often look for margins above 1.0; thresholds vary.

Does this include appreciation or tax benefits?

No. It focuses on operating cash flow and simple ratios. Depreciation and exit value are not modeled.

Rental Property Calculator

Plug in purchase, loan, rent, vacancy, taxes, insurance, reserves, HOA, and management to see back-of-napkin cash flow and common return metrics. Every field here is free; results are illustrative and do not replace underwriting, appraisals, or tax advice.

Purchase

Purchase price

Down payment ($)

Closing costs ($)

Loan interest rate (APR %)

Loan term (years)

Income

Monthly rent (gross)

Vacancy rate (%)

Expenses

Property tax and insurance are annual totals. Maintenance is % of purchase price per year (reserve-style).

Property tax ($ / year)

Insurance ($ / year)

Maintenance (% of price / year)

Property management (% of gross rent)

HOA ($ / month, optional)

Utilities ($ / month, optional)

ROI summary

Cap rate uses annual NOI before debt service divided by purchase price. Cash-on-cash is pre-tax cash flow divided by cash invested (down + closing). Total annual return adds estimated year-one loan principal paydown to cash flow, then divides by cash invested—illustrative, not a sale IRR.

Monthly cash flow

-$643

Annual: -$7,715

Cap rate

4.54%

Cash-on-cash

-8.92%

Total annual return (est.)

347.15%

Incl. ~year-one principal $308,000

Break-even rent (gross / mo)

$3,398

Gross rent for ~$0 cash flow after vacancy & management.

DSCR

0.69×

Loan amount

$308,000

Mortgage / mo

$2,101

Cash invested

$86,500

Operating expenses / mo

$1,059

Monthly cash flow snapshot

Effective rent vs. operating + mortgage vs. net.

Operating expense breakdown

Monthly; mortgage excluded.

Cap rate vs. cash-on-cash

Different denominators: price vs. cash invested.

Frequently asked questions

How is cap rate calculated?: Annual NOI before debt service (effective gross rent minus operating expenses in this model) divided by purchase price, expressed as a percentage.
What is DSCR?: Debt service coverage ratio—here, monthly NOI divided by the mortgage payment. Lenders often look for margins above 1.0; thresholds vary.
Does this include appreciation or tax benefits?: No. It focuses on operating cash flow and simple ratios. Depreciation and exit value are not modeled.