Rental Property Calculator
Analyze any rental property with 12 investment metrics, income/expense breakdown, 30-year projection, and reverse calculator. Make confident, data-driven investment decisions.
Property
Financing
Income
Expenses
Monthly Cash Flow
-$456.93
Cap Rate
4.16%
Cash-on-Cash
-6.53%
DSCR
0.69
Income
Expenses
NOI
$12,480/yr
Annual Cash Flow
-$5,483/yr
Monthly Mortgage
$1,496.93
Cap Rate
4.16%
Cash-on-Cash
-6.53%
ROI (Year 1)
-3.81%
GRM
12.5
Expense Ratio
43.00%
Break-Even Ratio
117.85%
Net Yield
4.16%
Total Cash Invested
$84,000
Principal Paid (Yr 1)
$2,286
30-Year Projection
Assumes 3% annual rent growth and 3% property appreciation.
| Year | Cash Flow | Principal Paid | Property Value | Equity | Cumulative Cash |
|---|---|---|---|---|---|
| 1 | -$5,483 | $2,286 | $300,000 | $77,286 | -$5,483 |
| 2 | -$5,073 | $2,451 | $309,000 | $88,736 | -$10,556 |
| 3 | -$4,650 | $2,628 | $318,270 | $100,634 | -$15,206 |
| 4 | -$4,215 | $2,818 | $327,818 | $113,000 | -$19,421 |
| 5 | -$3,766 | $3,022 | $337,653 | $125,857 | -$23,187 |
| 6 | -$3,304 | $3,240 | $347,782 | $139,226 | -$26,491 |
| 7 | -$2,829 | $3,474 | $358,216 | $153,134 | -$29,320 |
| 8 | -$2,338 | $3,725 | $368,962 | $167,606 | -$31,658 |
| 9 | -$1,834 | $3,995 | $380,031 | $182,670 | -$33,492 |
| 10 | -$1,314 | $4,284 | $391,432 | $198,354 | -$34,806 |
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Investment Metrics Guide
Understand the 12 metrics this calculator provides and how to use them:
Cap Rate
NOI / Purchase Price
Unlevered return metric. Compares properties regardless of financing. 5-8% is good in most markets.
Cash-on-Cash Return
Annual Cash Flow / Total Cash Invested
Return on your actual cash. Factors in leverage. 8-12% is a good target for most investors.
DSCR
NOI / Annual Debt Service
Debt safety metric. Lenders want 1.25+. Shows how well income covers mortgage payments.
GRM
Purchase Price / Annual Gross Rent
Quick screening tool. Lower is better. Under 12 is good for single-family, under 8 for multi-family.
Break-Even Ratio
(Expenses + Debt) / Gross Income
Occupancy needed to break even. Under 85% is safe. Over 100% means guaranteed loss.
Net Yield
NOI / Purchase Price
Same as cap rate but emphasizes yield perspective. Compare to bond yields and stock dividends.
The 1% Rule Explained
The Rule: Monthly rent should be ≥ 1% of purchase price.
Example: $300,000 property → need ≥ $3,000/mo rent to pass
At $2,000/mo: $2,000 / $300,000 = 0.67% — fails 1% rule
At $3,500/mo: $3,500 / $300,000 = 1.17% — passes 1% rule
The 1% rule is a quick screening tool, not a replacement for full analysis. Many profitable properties in expensive markets (California, NYC) fail the 1% rule but appreciate significantly. Properties in the Midwest may pass the 1% rule but have lower appreciation. Always combine with cap rate, DSCR, and full expense analysis.
DSCR Guide: What's a Good Ratio?
How to interpret your Debt Service Coverage Ratio:
< 1.0
Negative
Property loses money after debt service. Negative cash flow, avoid unless strong appreciation play.
1.0 - 1.1
Break-Even
Barely covers debt. No safety margin. One vacancy month wipes out returns.
1.1 - 1.25
Marginal
Positive but tight. May not qualify for DSCR loans. Limited room for unexpected expenses.
1.25 - 1.5
Good
Solid investment. Qualifies for most DSCR loans. 25-50% buffer above debt service.
1.5+
Excellent
Strong cash flow. Large safety margin. Can withstand vacancies and unexpected repairs.
Rental Property Analysis Tips
Run All the Numbers
Never rely on a single metric. Cap rate, CoC, and DSCR together paint the full picture of an investment.
Budget for CapEx
Reserve 5-10% of rent for capital expenditures. Roofs, HVAC, and appliances will need replacing eventually.
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Virtual staging of rental listings can increase rent by 5-15% and reduce vacancy. Just $0.10/photo with Agent Lens.
Use the Reverse Calculator
Start with your target return and work backward to the max price. Never overpay for a deal again.
Frequently Asked Questions
What metrics matter most when analyzing a rental property?
The most important metrics are Cash-on-Cash Return (measures return on your actual cash invested), DSCR (shows if rental income covers debt), and Cap Rate (unlevered return). Together they tell you profitability, safety, and comparative value. Cash flow is king, but ROI including principal paydown gives the full picture.
What is the 1% Rule in real estate?
The 1% Rule states that monthly rent should be at least 1% of the purchase price. For a $300,000 property, that means $3,000/month rent. It is a quick screening tool, not a definitive analysis. Many profitable properties in high-appreciation markets fail the 1% rule, while properties that pass may still have poor returns if expenses are high.
What is DSCR and why does it matter?
Debt Service Coverage Ratio (DSCR) = NOI / Annual Debt Service. A DSCR of 1.25 means your property earns 25% more than needed to cover mortgage payments. Lenders typically require DSCR of 1.2-1.25 minimum for investment property loans. Below 1.0 means negative cash flow. Above 1.5 is considered very safe.
How should I analyze a rental property investment?
Start with the 1% rule to screen quickly. Then calculate all expenses (taxes, insurance, management, maintenance, CapEx, vacancy). Compute NOI, then subtract debt service for cash flow. Evaluate Cap Rate (compare to market), Cash-on-Cash (your return), DSCR (safety margin), and Break-Even Ratio (risk level). Use the 30-year projection to see long-term wealth building.
What expenses should I include in rental property analysis?
Include: property taxes, insurance, property management (8-10% typical), maintenance/repairs (10% of rent), capital expenditure reserves (5% of rent for roof, HVAC, etc.), vacancy loss (5-8%), and HOA if applicable. Many investors underestimate expenses. The 50% Rule suggests total expenses (excluding mortgage) average 50% of gross rent.
How does the Reverse Calculator work?
The Reverse Calculator takes your target Cash-on-Cash return and works backward to find the maximum purchase price that achieves that return, given your current rent, expenses, and financing terms. For example, if you want 10% CoC on $2,000/month rent with 25% down at 7%, it tells you the highest price you should pay.