Net Rental Income Calculator
Collecting $2,000 in rent is not earning $2,000. Vacancy eats a share, then property taxes, insurance, maintenance, management, and the rest take their cuts. Many landlords discover their “profitable” property nets a few hundred dollars, or nothing, once every line is counted.
The calculator below counts every line. Enter the monthly rent, a vacancy rate, and each expense category. Optionally add the mortgage payment and the property value to get true cash flow and the cap rate investors use to compare properties. The full expense breakdown shows exactly where the money goes.
Rent minus vacancy minus every expense, with cash flow and cap rate.
5 to 10 is typical; use your market’s average.
Adds the true cash-flow line.
Adds the cap rate.
Net rental income here is before income tax and before mortgage principal paydown. Cash flow after mortgage is the spendable monthly surplus.
How to use the net rental income calculator
Enter the monthly rent and your vacancy rate (5 to 10% suits most markets; use your area’s actual average if you know it). Fill in every monthly expense category, leaving zeros where a cost does not apply. If the property is financed, add the mortgage payment; if you want the investor’s cap rate, add the property value. Press Calculate.
The formulas
Vacancy loss = Rent × Vacancy %. Adjusted income = Rent − Vacancy loss. Total expenses = Taxes + Insurance + Maintenance + Management + Utilities + Advertising + HOA + Other. Net monthly income = Adjusted income − Total expenses. Net annual = Net monthly × 12. Cash-flow margin = Net monthly ÷ Adjusted income × 100. Cash flow after mortgage = Net monthly − Mortgage payment. Cap rate = Net annual ÷ Property value × 100.
Worked example, verified against the tool
Monthly rent $2,000, vacancy 5%. Expenses: taxes $200, insurance $100, maintenance $150, management $200, utilities $0, advertising $50, HOA $0, other $100. Mortgage $700, property value $260,000.
Vacancy loss = 2,000 × 5% = $100. Adjusted income = $1,900. Total expenses = 200 + 100 + 150 + 200 + 0 + 50 + 0 + 100 = $800. Net monthly = 1,900 − 800 = $1,100. Net annual = $13,200. Cash-flow margin = 1,100 ÷ 1,900 = 57.89%. Cash flow after mortgage = 1,100 − 700 = $400/month. Cap rate = 13,200 ÷ 260,000 = 5.08%. The calculator shows exactly these figures: the $2,000 rent is really $400 of spendable cash flow.
What the numbers tell you
Net monthly income is the property’s operating profit before financing: the purest read on whether the asset works. Cash flow after mortgage is what actually lands in your pocket each month; if it is negative, you are feeding the property. Cash-flow margin shows what fraction of collected rent you keep; anything under 20% means expenses are eating the deal. Cap rate lets you compare this property against any other investment: a 5% cap rate on rentals competes with bonds, not with stocks.
What competitors miss
The strongest competing landlord calculator gives you net monthly, annual cash flow, and cap rate, but it lumps all expenses into a few boxes with no breakdown, so you cannot see which cost is the problem. The institutional-grade alternative buries the answer in DSCR and after-tax metrics most landlords will never use. This calculator keeps the full nine-line expense breakdown (the line that tells you maintenance is the leak, not taxes), adds the mortgage and cap-rate outputs the favorite competitor has, shows the cash-flow margin none of them show, and includes copy and share.
Frequently asked questions
What is net rental income?
Gross rent minus vacancy loss minus all operating expenses. It is the property’s true operating profit, before mortgage payments and income tax.
What vacancy rate should I use?
5 to 10% fits most US markets; tight coastal markets run lower, soft markets higher. If you own the property, use your actual trailing-12-month vacancy instead of a rule of thumb.
Should the mortgage payment count as an expense?
Not in net rental income, which measures the asset. It counts in cash flow, which measures your pocket. That is why the calculator shows both: a property can have healthy net income and negative cash flow if it is over-leveraged.
What is a good cap rate?
Residential rentals often trade at 4 to 8% cap rates depending on the market; higher usually means higher risk or lower growth expectations. Compare against similar properties in the same area, not against national averages.
Does net rental income include depreciation?
No. Depreciation is a tax concept that lowers taxable income without moving cash. It matters on your tax return, not in this operating calculation.
Why is my cash flow negative when net income is positive?
Because the mortgage payment exceeds the operating surplus. The property works as an asset but not at your financing terms: a larger down payment, a lower rate, or a cheaper property would fix it.