U.S. rental properties
Rental property calculator: cash flow, cap rate and DSCR
A rental property calculator estimates whether a long-term rental pays for itself. It subtracts vacancy, operating costs and the mortgage payment from the rent to show your monthly cash flow, then measures the deal with net operating income (NOI), cap rate, cash-on-cash return and the debt service coverage ratio (DSCR). Enter your own numbers; the results update as you type.
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Calculator
Estimate your rental property cash flow
The calculator starts with the worked example below. Replace each value with the numbers for the property you are evaluating.
Results
Monthly cash flow −$98.93. Cap rate 5.59%. Cash-on-cash return −1.41%. DSCR 0.93.
- Monthly cash flow
- −$98.93
- Annual cash flow
- −$1,187.17
- NOI per month
- $1,398.00
- NOI per year
- $16,776.00
- Cap rate
- 5.59%
- 6.07% before the CapEx reserve
- Cash-on-cash return
- −1.41%
- DSCR
- 0.93
- Mortgage payment (P&I)
- $1,496.93
- Operating expenses per month
- $882.00
- Total cash invested
- $84,000.00
- 1% rule
- 0.80% · below 1%
- Break-even rent
- $2,528.48
See the monthly and annual breakdown
| Line | Monthly | Annual |
|---|---|---|
| Rent | $2,400.00 | $28,800.00 |
| Vacancy | −$120.00 | −$1,440.00 |
| Other income | $0.00 | $0.00 |
| Effective gross income | $2,280.00 | $27,360.00 |
| Property tax | −$300.00 | −$3,600.00 |
| Insurance | −$150.00 | −$1,800.00 |
| HOA fees | $0.00 | $0.00 |
| Maintenance and repairs | −$120.00 | −$1,440.00 |
| CapEx reserve | −$120.00 | −$1,440.00 |
| Property management | −$192.00 | −$2,304.00 |
| Utilities | $0.00 | $0.00 |
| Net operating income (NOI) | $1,398.00 | $16,776.00 |
| Mortgage payment (P&I) | −$1,496.93 | −$17,963.17 |
| Cash flow | −$98.93 | −$1,187.17 |
Educational estimate based only on your inputs; not financial advice. Nothing you type leaves your browser.
Formulas
How the numbers are calculated
The calculator uses the same formulas as the property analysis in the MyInversorAI app. One input differs: the app also adds $1,500 of inspection, appraisal and loan fees to cash invested, so add them to the closing costs here to compare like for like. Amounts are monthly unless noted, and percentages of rent apply to the full monthly rent before vacancy.
- Mortgage payment (principal and interest)
P&I = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)L is the loan amount (price minus down payment), r is the annual rate ÷ 12 and n is the term in months. At 0% interest the payment is L ÷ n. Taxes and insurance are counted as operating expenses, not in this payment.
- Effective gross income (EGI)
EGI = rent + other income − rent × vacancy %Vacancy and credit loss reduce the rent you collect. Other income, such as parking or laundry, is added after vacancy.
- Operating expenses
OpEx = tax ÷ 12 + insurance ÷ 12 + HOA + utilities + rent × (maintenance % + CapEx % + management %)Maintenance and CapEx reserves are real costs even in months when nothing breaks. The mortgage payment is not an operating expense.
- Net operating income (NOI)
NOI = EGI − OpEx; annual NOI = monthly NOI × 12What the property earns before financing. Because the CapEx reserve is included, this NOI is slightly more conservative than one that leaves reserves out.
- Cash flow
Cash flow = NOI − P&IWhat is left each month after the loan payment (or what you add when it is negative), before income taxes.
- Cap rate
Cap rate = annual NOI ÷ purchase priceThe property’s yield on its price, ignoring how the purchase is financed. The results also show it before the CapEx reserve, the way many listings quote it.
- Cash-on-cash return
CoC = annual cash flow ÷ (down payment + closing costs)The first-year, pre-tax return on the cash you put in. It leaves out appreciation, loan paydown and tax effects.
- Debt service coverage ratio (DSCR)
DSCR = annual NOI ÷ annual debt service (P&I × 12)Below 1.00, the property does not earn enough to cover its loan payments. It is not shown when there is no loan.
- 1% rule
Monthly rent ÷ purchase price ≥ 1%A quick screening rule of thumb, not a decision rule.
- Break-even rent
Rent = (P&I + fixed costs − other income) ÷ (1 − vacancy % − maintenance % − CapEx % − management %)The monthly rent at which cash flow is exactly $0 with your other assumptions unchanged. Fixed costs are property tax, insurance, HOA and utilities.
Worked example
Worked example: a $300,000 single-family rental
These are the calculator’s starting values. They are typical planning assumptions chosen to illustrate the math, not a forecast for any market.
Assumptions
- Purchase price
- $300,000
- Down payment
- 25% ($75,000)
- Loan
- 7% fixed for 30 years
- Closing costs
- 3% of the price ($9,000)
- Monthly rent
- $2,400 per month
- Other income
- $0 per month
- Vacancy
- 5% of rent
- Property tax
- $3,600 per year
- Insurance
- $1,800 per year
- HOA
- $0 per month
- Maintenance and repairs
- 5% of rent
- CapEx reserve
- 5% of rent
- Property management
- 8% of rent
- Utilities (owner-paid)
- $0 per month
Step by step
| Step | Calculation | Result |
|---|---|---|
| Loan amount | $300,000 − $75,000 down payment | $225,000 |
| Mortgage payment (P&I) | $225,000 at 7% for 360 months | $1,496.93 per month |
| Effective gross income | $2,400 rent − $120 vacancy (5%) | $2,280 per month |
| Operating expenses | $300 tax + $150 insurance + $120 maintenance + $120 CapEx + $192 management | $882 per month |
| Net operating income (NOI) | $2,280 − $882 | $1,398 per month ($16,776 per year) |
| Cash flow | $1,398 − $1,496.93 | −$98.93 per month (−$1,187.17 per year) |
| Cap rate | $16,776 ÷ $300,000 | 5.59% |
| Cash-on-cash return | −$1,187.17 ÷ ($75,000 + $9,000) | −1.41% |
| DSCR | $16,776 ÷ $17,963.17 annual debt service | 0.93 |
| 1% rule | $2,400 ÷ $300,000 | 0.80% (below 1%) |
| Break-even rent | ($1,496.93 + $450 fixed costs) ÷ (1 − 23%) | $2,528.48 per month |
With these assumptions the property earns $1,398 a month before financing, but the loan costs $1,496.93, so the owner would add about $98.93 every month and the DSCR is 0.93. Cash flow reaches $0 at a rent of about $2,528.48, or with a lower price, a larger down payment or a lower rate. Thin or negative results like this one are why it pays to run the numbers before making an offer.
Benchmarks · It depends
What good numbers look like (and why it depends)
There is no universal “good” number. Investors weigh these figures against their goals, the market, the property’s condition and the risk they accept. The ranges below are commonly discussed starting points, not targets or promises.
| Metric | Commonly discussed range | What to keep in mind |
|---|---|---|
| Monthly cash flow | Positive after every reserve | Many investors want a cushion above $0 after vacancy, repairs, CapEx and management, so one surprise does not turn the month negative. Some accept thin or negative cash flow in exchange for expected appreciation, a riskier bet that depends on future prices. |
| Cap rate | Often about 4% to 10% | Lower in high-cost, in-demand areas; higher where risk, vacancy or repair needs are higher. Compare cap rates only between similar properties in the same area, calculated the same way. |
| Cash-on-cash return | Targets often cited: 6% to 12% | It depends on how much you borrow and at what rate. Compare it with what the same cash could earn elsewhere, considering the work and risk of owning a rental. |
| DSCR | 1.00 or more; lenders often look for about 1.0 to 1.25 | Below 1.00, NOI does not cover the loan payment. Requirements vary by lender, program and borrower, and this calculator does not tell you whether a loan will be approved. |
| 1% rule | Monthly rent of 1% of the price or more | A fast first filter. Many solid rentals in high-cost markets fall below it, and passing it does not mean a deal works once every cost is counted. |
Use these ranges to ask better questions, not to decide. Verify rent with local comparables, taxes with the county, insurance with real quotes and financing with a lender.
Avoid these
Common mistakes when estimating rental cash flow
- Leaving vacancy at zero
- Even a well-located rental sits empty between tenants. A 5% vacancy allowance is about 18 days a year.
- Treating repairs and CapEx as optional
- Roofs, HVAC systems and water heaters wear out on their own schedule. Setting their reserves to 0% makes cash flow look better than it will be.
- Using the seller’s property tax bill
- In many states the assessment is reset after a sale, so the new owner’s tax bill can be higher. Check the county’s rules and the current tax rate.
- Guessing the insurance premium
- Premiums vary widely by state, flood zone and building age, and a landlord policy differs from a homeowner policy. Get a quote before you rely on the number.
- Assuming self-management is free
- Your time has a cost, and you may hire a manager later. Many investors model a management fee even when they plan to manage the property themselves.
- Confusing the cap rate with your return
- The cap rate ignores financing. With a loan, your cash-on-cash return can be much higher or much lower than the cap rate.
FAQ
Rental property calculator questions
What is a good cash flow for a rental property?
It depends on your goals, the market and the risk you take on. Many investors look for positive cash flow after setting aside vacancy, repairs, CapEx and management, with enough cushion to absorb an unexpected expense. Negative cash flow means you add money every month.
What is the difference between NOI and cash flow?
NOI is income minus operating expenses, before any loan payment. Cash flow subtracts the mortgage payment from NOI. Two buyers of the same property have the same NOI but different cash flow if they finance it differently.
Should property taxes and insurance be part of the mortgage payment?
Many loans collect them through an escrow account, but they are property costs either way. This calculator shows principal and interest as the mortgage payment and counts taxes and insurance as operating expenses, so nothing is counted twice.
Why are maintenance, CapEx and management percentages of the rent?
It is a common way to budget costs that grow with the property’s income and size. If you have actual figures, such as a manager’s flat fee, convert them to a percentage of the rent for a closer estimate.
Does this calculator save or share my numbers?
No. It runs in your browser. Nothing you type is stored, sent to MyInversorAI or used for analytics, and the values reset when you leave the page.
Can I use it for a short-term rental?
It is built for long-term rentals with monthly rent. Short-term rentals have nightly rates, seasonal occupancy, cleaning and platform fees that this calculator does not model. The full analysis in the MyInversorAI app includes a short-term rental strategy.
Next step
Run the full analysis in MyInversorAI
The free calculators check one long-term rental at a time with your own assumptions. A free MyInversorAI account adds a full property analysis that evaluates up to five strategies (rental, short-term rental, flip, BRRRR and resale) and ZipFinder listings with full addresses and Zillow links. Accounts start on the Free plan; paid plans add an English or Spanish PDF with a property visit guide.
Read before deciding
Educational estimate, not advice
The free calculators are for education and screening. They are not financial, tax, lending, legal or investment advice, an appraisal or a loan offer, and they do not guarantee any result. The figures depend entirely on the assumptions you enter. They are intended for properties in the United States. Before you make a decision, verify rent, taxes, insurance, repairs and financing with qualified professionals.