Introduction
A rental property can make you money each month and grow in value over time. But not every deal is a good deal. This investment property calculator helps you find out before you buy.
Type in the purchase price, your down payment, your loan terms, the rent you expect, and your yearly costs. The calculator then shows you the numbers real estate investors care about most:
- Net Operating Income (NOI): rent left over after operating costs, before loan payments.
- Before Tax Cash Flow: the cash you keep each year after costs and the mortgage.
- Cap Rate: the return on the property itself, with no loan counted.
- Cash on Cash Return: the return on the actual cash you put in.
- Debt Coverage Ratio (DCR): whether rent covers the loan payment. Most lenders want 1.25 or higher.
- GRM, price per unit, and expense ratio: quick ways to compare one deal to another.
You also get a full income statement, a step-by-step look at the math, and charts that show where every rent dollar goes. Change any number to test a different rent, rate, or price, then print your report to share with a lender or partner.
How to use our Investment Property Calculator
Enter the price, loan details, rent income, and yearly expenses for a rental property. The calculator shows your net operating income, before-tax cash flow, CAP rate, cash on cash return, debt coverage ratio, and other key numbers.
Property and financing
Purchase Price: Type the full price you will pay for the property.
Down Payment (%): Type the part of the price you pay in cash, as a percent. The dollar box updates on its own.
Down Payment ($): Or type your cash down payment in dollars. The percent box updates on its own.
Amount Owed on Property: This is your loan amount. It fills in as price minus down payment. Change it if your real loan balance is different.
Loan Term (years): Type how many years you have to pay off the loan, such as 30.
Interest Rate: Type the yearly interest rate on the loan.
Payment Type: Pick Principal & Interest for a normal loan, or Interest-Only if you pay only interest.
Monthly Loan Payment: This fills in for you. Type your lender's real quote if you have one, or press Recalculate Payment to get it back.
Closing Costs: Type the one-time fees you pay at closing. This counts as cash you invest.
Income
Gross Scheduled Income (annual): Type the total rent for one year if every unit stays full.
Vacancy Rate: Type the percent of rent you expect to lose when units sit empty.
Number of Units: Type how many rentable units the property has. This is used for per-unit numbers.
Other Income (annual): Type extra yearly money from things like laundry, parking, storage, or pet rent. Leave it at 0 if there is none.
Required CAP Rate: Optional. Type the CAP rate you want to earn, and the tool shows what the property should be worth. Leave it blank to skip this.
Annual operating expenses
Accounting: Yearly cost for bookkeeping or tax prep.
Admin / Legal / Bank Charges: Yearly office, filing, and bank fees.
Advertising: Yearly cost to list the units and find tenants.
Electricity: Yearly power bill you pay, not the tenant.
Elevator: Yearly elevator service and repair cost.
Gas: Yearly gas bill you pay.
Landscaping: Yearly lawn, yard, and snow care.
Legal: Yearly lawyer fees, such as evictions or leases.
Maintenance & Repair: Yearly cost to fix and upkeep the property.
Payroll Taxes: Yearly taxes on any staff you pay.
Permits & Licenses: Yearly city or county rental fees.
Pest Control: Yearly bug and rodent service.
Pool: Yearly pool cleaning and care.
Property Insurance: Yearly insurance premium. You can type a percent of the price and press Calc to fill the dollar box.
Property Management: Yearly fee to a manager. You can type a percent of rent (most are 6% to 10%) and press Calc.
Real Estate Taxes: Yearly property tax bill. You can type a percent of the price and press Calc, or look it up with the Property Tax Calculator.
Security: Yearly alarm, camera, or guard cost.
Supplies: Yearly cleaning and building supplies.
Telephone: Yearly phone or internet cost for the property.
Tenant Buyout: Money paid to a tenant to move out.
Trash: Yearly garbage pickup cost.
Water: Yearly water and sewer bill you pay.
Other (1) and Other (2): Use these for any yearly costs not listed above.
When you are done, press Calculate to see your results, charts, and a step-by-step solution. Press Reset Calculator to start over, or Print Report to save a copy.
What Is an Investment Property?
An investment property is real estate you buy to make money, not to live in. Most people rent it out to tenants. The rent pays the bills, and what is left over is your profit. Some owners also hope the property grows in value over time.
How Rental Property Returns Work
Money from an investment property moves through a few simple steps:
- Gross scheduled income: all the rent you would collect if every unit stayed full all year.
- Vacancy loss: rent you miss when a unit sits empty or a tenant moves out.
- Gross operating income (GOI): the rent you really collect, plus extras like laundry, parking, or pet fees.
- Operating expenses: taxes, insurance, repairs, utilities, management, and other yearly costs.
- Net operating income (NOI): GOI minus operating expenses. This does not include your loan payment.
- Before tax cash flow (BTCF): NOI minus your yearly loan payments. This is the cash you keep.
Key Numbers Investors Watch
- Cap rate: NOI divided by price. It shows the return if you paid cash, with no loan. Most markets land near 4% to 10%.
- Cash on cash return: cash flow divided by the cash you put in (down payment plus closing costs). It shows how hard your own money works.
- Debt coverage ratio (DCR): NOI divided by yearly loan payments. Above 1.00 means the rent covers the loan. Most lenders want 1.25 or higher.
- Gross rent multiplier (GRM): price divided by gross rent. A lower number is usually a better deal.
- Net income multiplier (NIM): price divided by NOI. It is the flip side of the cap rate.
- Expense ratio: expenses as a share of income. Many rentals run near 35% to 50%.
- Price per unit: price divided by the number of units. Good for comparing deals in the same area.
Why These Numbers Matter
Two properties can have the same price and very different returns. One may have high taxes, weak rent, or a costly loan. Running the numbers before you buy shows if the rent really covers the costs, how much cash you might keep each month, and whether a lender will approve the loan. Lenders also look at your personal debt load, which you can check with the DTI Calculator.
Things That Change Your Results
Your down payment, interest rate, and loan term set your monthly payment. A bigger down payment lowers the payment and raises cash flow, but it also ties up more cash, which can lower your cash on cash return. Interest-only loans lower payments at first but do not pay down the balance. Taxes, insurance, and repairs also shift over time, so it helps to test a few different guesses and see how the deal holds up.
Costs New Investors Often Forget
- Vacancy and tenant turnover
- Repairs and long-term upkeep, like a roof or furnace
- Property management fees, often 6% to 10% of rent
- Closing costs at purchase
- Higher insurance rates for rentals
- Depreciation and taxes on a future sale
Leaving these out makes a deal look better than it is. Adding them gives you a realistic picture of your rental property's cash flow and return.