Buying Rental Property Calculator
Every rental listing looks profitable in the advert. The rent is big, the mortgage looks manageable, and the costs that decide the deal, vacancy, management, maintenance, the lender coverage test, sit in the small print or nowhere at all. Investors who skip them buy cash-flow problems at full price.
This calculator runs the full analysis from purchase price, financing, rent, and operating expenses: monthly cash flow, net operating income, cap rate, cash-on-cash return, the 1% rule check, breakeven rent, gross rent multiplier, and the debt service coverage ratio your lender will ask about, plus a projection over a holding period you choose (5 years pre-filled) and a vacancy stress test.
Purchase and financing
Income and expenses
Leave any expense at zero to treat it as none. Maintenance should include a reserve for big-ticket replacements (roof, HVAC, appliances).
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Educational estimates only, not investment advice. Verify rent with local comparables, inspect the property, and confirm expenses with a professional before purchasing. Past appreciation does not predict future returns.
Quick Answer
Key takeaways
- Cash flow is what you can spend; total return adds loan paydown and appreciation, which you cannot spend until you sell or refinance. This tool reports both and never blends them.
- Breakeven rent here is computed correctly: vacancy and management scale with the rent charged, so the formula divides fixed costs by (1 – vacancy – management) instead of adding them at today dollar values.
- DSCR is the lender test hiding inside the deal: at 1.40 this property earns 40% more than its mortgage costs, comfortably over the 1.20 to 1.25 bar.
- The stress test is the honesty check: this deal stays cash-flow positive even at 20% vacancy, which is rarer than listing copy suggests.
- Gross yield and net yield are both here: gross yield is the rent-to-price line (14.1% in the example) and net yield is the cap rate (7.9%), which is net operating income over price.
- Quick Answer
- How to use the buying rental property calculator
- The seven numbers, and the formulas behind them
- Worked example: the $280,000 duplex, verified end to end
- Breakeven rent: the formula most tools get wrong
- The projection over your holding period, and the vacancy stress test
- What competing calculators miss
- Frequently Asked Questions
- Add This Calculator to Your Website
- References
How to use the buying rental property calculator
Work through the purchase block first: price, down payment in dollars, closing costs, and upfront repairs. Those four, added together where they belong, become your cash invested, the denominator of the cash-on-cash return, so understating repairs flatters the return. Then set the loan rate and term from an actual investor quote, not an owner-occupier advert rate.
The income block is where deals are won or lost on honesty. Use rent from comparable leased properties, the tax bill as it will be reassessed at your price, and a maintenance figure that includes a reserve for the roof and HVAC rather than a hopeful guess. Vacancy and management are percentages of rent: count management even if you plan to self-manage, because your time has a price and you may hand the property over later. Press Calculate and read the verdict strip, then the projection (which runs for the holding period you set) and stress tables. If the property is still at the screening stage, the two-minute buy to rent ratio calculator filters it first.
The seven numbers, and the formulas behind them
Each output answers a different question, and a deal has to survive all of them.
Two yield names from rent-return screening live here too: gross rental yield is the rent-to-price line (annual rent over price, 14.1% in the worked example), and net rental yield is the cap rate (net operating income over price, 7.9%). Gross yield ignores expenses, so it flatters; net yield is the number to compare across properties.
Cap rate ignores financing, so it compares properties; cash-on-cash includes your actual loan, so it compares deals as you would buy them. The dedicated cap rate calculator isolates the first of those if you are comparing listings quickly. DSCR belongs to your lender as much as to you: it is the ratio DSCR loan programs underwrite, and the SBA guide to loan programs describes the same coverage logic lenders apply across small-business and investment lending.
Worked example: the $280,000 duplex, verified end to end
The calculator is pre-filled with this case: $70,000 down, $8,400 closing, $5,000 repairs, a $210,000 loan at 6.5% for 30 years, $3,300 monthly rent, $3,900 tax, $1,700 insurance, $6,220 maintenance, 6% vacancy, 8% management, 3% appreciation. Every figure is what the tool returns.
| Metric | Result | Reading |
|---|---|---|
| Mortgage (principal and interest) | $1,327.34/mo | Largest single cost |
| Net operating income | $22,236/yr | Before the mortgage |
| Monthly cash flow | $525.66 | $6,307.89 a year |
| Cap rate | 7.9% | Strong for a financed deal |
| Cash-on-cash return | 7.6% | On $83,400 invested |
| Rent-to-price and 1% rule | 14.1%/yr | Meets the 1% rule |
| Breakeven rent | $2,689/mo | $611 of cushion under market rent |
| Gross rent multiplier | 7.1x | Price per dollar of annual rent |
| DSCR | 1.40 | Clears the 1.25 lender bar |
| Five-year average annual return | 21.5% | Cash flow + $13,417 equity + $44,597 appreciation |
| Total gain over the 5-year holding period | $89,553 | Cash flow + $13,417 equity + $44,597 appreciation |
Breakeven rent: the formula most tools get wrong
Breakeven rent is the rent at which cash flow is exactly zero, and it is the fastest way to measure a deal cushion. The trap is that vacancy and management are percentages of whatever rent you charge, so at the breakeven rent they are smaller in dollars than they are at market rent. Tools that add vacancy and management at today dollar values overstate the breakeven and make thin deals look safer than they are. This calculator divides the fixed monthly costs ($1,327.34 mortgage + $325 tax + $141.67 insurance + $518.33 maintenance = $2,312.34) by (1 – 0.06 – 0.08) = 0.86, giving $2,689. Market rent of $3,300 sits $611 above it, which is the margin that absorbs a bad year.
The projection over your holding period, and the vacancy stress test
Cash flow is only one of three wealth builders. Tenants also pay down your loan ($13,417 of equity over five years here) and the property may appreciate ($44,597 at 3% a year, taking the value to $324,597). The projection table compounds value yearly and tracks cumulative cash flow and equity, then expresses the total over the holding period as an average annual return on cash invested (21.5% over the pre-filled 5 years). Treat the appreciation slice with the caution the FHFA House Price Index history justifies: markets cycle, and the deal should stand on cash flow first. Landlords who hold property long term often compare that path with a land contract or cash rent calculator arrangement on the same parcel, which is a different risk profile entirely.
| Vacancy rate | Monthly cash flow | Reading |
|---|---|---|
| 0% | $723.66 | Full occupancy |
| 5% | $558.66 | Typical planning case |
| 10% | $393.66 | One unit empty over a year, in effect |
| 15% | $228.66 | A rough year |
| 20% | $63.66 | Still positive, barely |
A deal that only works at 0% vacancy is not a deal. This one survives to 20%, which is exactly the kind of evidence to weigh alongside an appreciation rate calculator check on what the local market has actually delivered, rather than what a projection assumes.
What competing calculators miss
The rental tools reviewed for this page cluster tightly around three outputs (cash flow, cap rate, cash-on-cash) and share the same blind spots.
Miss 1: breakeven rent computed the wrong way. Adding vacancy and management at current dollar values is the common shortcut, and it is mathematically wrong for the reason covered above. The error always flatters the deal.
Miss 2: no DSCR, no GRM. The coverage ratio your lender underwrites and the multiplier brokers quote are missing from most consumer tools, so borrowers discover the lender test at application time. Both are one division each, and both are here.
Miss 3: no stress test, no projection. A single-point estimate at full occupancy tells you nothing about fragility. The five-vacancy-level table and the multi-year equity picture turn a snapshot into a risk view. The projection here runs for the holding period you enter, not a fixed five years, and the gross and net yield lines give the quick screening numbers alongside the full analysis.
One honest limit: this analysis is pre-tax. Depreciation, which the IRS Publication 527 on residential rental property covers in full, improves the after-tax picture for most landlords, and no projection here can promise the appreciation you enter.
Frequently Asked Questions
It depends on the market. Stable metro areas often trade at 4% to 6%, secondary markets at 6% to 8%, and higher-risk areas above that. A high cap rate is not automatically better: cheap markets carry higher vacancy, slower appreciation, and greater economic risk. Compare cap rates within the same neighborhood, never across cities.
Annual pre-tax cash flow divided by the total cash you invested (down payment plus closing costs plus upfront repairs), expressed as a percentage. It measures what your actual cash earns each year. With current rates, 4% to 8% is realistic for financed deals; 8% or more is strong.
Monthly rent should be at least 1% of the purchase price (annual rent divided by price of 12% or more). It is a quick screening filter, not a law: expensive coastal markets rarely meet it, and meeting it does not guarantee positive cash flow after all expenses. This tool shows the exact rent-to-price percentage and how it compares.
Divide your fixed monthly costs (mortgage, tax, insurance, maintenance) by (1 – vacancy rate – management rate). Vacancy and management are percentages of the rent charged, so they must scale with the breakeven figure rather than being added at today dollar values.
Yes. Vacancy (often 5% to 8%) reserves for months without a tenant, and management (often 8% to 10% of rent) applies even if you self-manage today, because your time has value and you may hire management later. Deals that only work at 0% vacancy are fragile.
Lenders typically want 1.20 to 1.25 or higher. At 1.25 the property net operating income covers the mortgage payments with a 25% cushion. Below 1.00 the property cannot service its own debt, and you feed it cash every month.
More than the down payment: add closing costs (often 2% to 5% of price), upfront repairs, and a reserve fund for the first vacancy or major repair. This tool totals the first three as cash invested, $83,400 in the worked example, so your cash-on-cash return reflects reality.
No. The projection uses your appreciation assumption to illustrate total return, but markets cycle and individual properties can lose value. Underwrite the deal on cash flow first; treat appreciation as upside, not as the reason the numbers work.
Gross rental yield is annual rent divided by price, before any expense: the rent-to-price line on this tool, 14.1% a year in the worked example. Net rental yield is net operating income divided by price, which is the cap rate, 7.9% in the same example. Gross yield is a fast screen; net yield is the comparable figure, because two properties with the same gross yield can have very different expenses.
Yes. Set the projection holding period in years; the worked example uses 5. The projection table, the total gain line and the average annual return all follow the holding period you enter, up to 30 years.
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References
- Internal Revenue Service, “Publication 527: Residential Rental Property” – the federal guide to rental income, expenses, and depreciation that frames the after-tax picture this pre-tax analysis feeds into. IRS: Publication 527, Residential Rental Property. Accessed October 2026.
- Federal Housing Finance Agency, “House Price Index” – historical appreciation data for testing projection assumptions against what markets actually delivered. FHFA: House Price Index. Accessed October 2026.
- US Small Business Administration, “Loan programs” – how lenders use coverage ratios when underwriting loans secured by income-producing property. SBA: Loan programs. Accessed October 2026.
- Consumer Financial Protection Bureau, “Owning a Home” toolkit – the purchase process, inspections, and closing steps that sit around the investment analysis. CFPB: Owning a Home. Accessed October 2026.