Rental Property Calculator
This rental property calculator evaluates a buy-to-let deal through the four metrics landlords live by: monthly cash flow, annual net operating income, cap rate, and cash-on-cash return. You feed it the purchase price, down payment, financing terms, expected rent, operating expenses, and a vacancy allowance, and it works out whether the property pays you each month and how hard your invested cash is working. It is built for investors screening properties before they make an offer.
Formula
NOI = Rent×(1−v)×12 − Exp×12; Cash flow = NOI − Mortgage×12; Cap = NOI÷Price; CoC = Cash flow÷Down
- Rent
- Gross monthly rent before vacancy
- v
- Vacancy rate as a decimal, reducing collected rent
- Exp
- Monthly operating expenses (taxes, insurance, upkeep, management)
- Mortgage
- Monthly loan payment on (Price − Down)
- Down
- Cash invested as the down payment
How it works
- Enter the Purchase Price and Down Payment; the difference is financed at the Mortgage Rate and Loan Term you set with the sliders.
- Enter the Monthly Rent Income and Monthly Expenses, then set the Vacancy Rate slider (0%-20%), which trims gross rent to an effective rent.
- Net operating income is effective annual rent minus annual expenses; cash flow subtracts the annual mortgage; cap rate is NOI ÷ price; and cash-on-cash is annual cash flow ÷ down payment.
Worked example
A $200,000 property, $40,000 down, 6% over 30 years, $1,800 rent, $400 monthly expenses, 5% vacancy.
- Effective rent = 1,800 × (1 − 0.05) = $1,710/mo; annual NOI = 1,710 × 12 − 400 × 12 = 20,520 − 4,800 = $15,720.
- Mortgage on $160,000 at 6% / 30 yrs ≈ $959.28/mo; annual cash flow = 15,720 − 959.28 × 12 = $4,208.63, so $350.72/mo.
- Cap rate = 15,720 ÷ 200,000 = 7.86%; cash-on-cash = 4,208.63 ÷ 40,000 = 10.52%.
Monthly cash flow about $350.72, annual NOI $15,720, cap rate 7.86%, and cash-on-cash return 10.52%.
Frequently asked questions
- What is the difference between cap rate and cash-on-cash return?
- Cap rate measures the property's unleveraged yield: net operating income divided by purchase price, ignoring the mortgage. Cash-on-cash divides your actual annual cash flow after the mortgage by the cash you invested, so it reflects the effect of financing.
- Is the mortgage payment included in net operating income?
- No. NOI is income minus operating expenses only, by convention excluding financing. The mortgage is subtracted afterward to get cash flow, which is why a property can have positive NOI but negative cash flow if the loan payment is large.
- How does the vacancy rate affect the numbers?
- The vacancy rate reduces the rent you actually collect, so a 5% vacancy treats $1,800 rent as $1,710 of effective income. Higher vacancy lowers NOI, cash flow, cap rate, and cash-on-cash return all at once.
- What should I include in monthly expenses?
- Enter recurring operating costs such as property taxes, insurance, maintenance, property management, and HOA dues. Do not include the mortgage payment, since the tool models financing separately when computing cash flow.