Analyze rental income, expenses, NOI, cap rate, and annual cash-on-cash return for any investment property.
How to Use This Rental Property Cash Flow Calculator
Enter your property's monthly rent, vacancy rate, and all monthly expenses including your mortgage payment, taxes, insurance, and maintenance costs. Add the purchase price and your total cash invested (down payment + closing costs + rehab). Hit Calculate Cash Flow to instantly see your monthly and annual cash flow, net operating income (NOI), cap rate, and cash-on-cash return.
Switch to the 10-Year Projection tab to see how rent growth, appreciation, and expense inflation affect your returns over time.
Why This Matters
Rental real estate is one of the most powerful wealth-building tools available — but only if the numbers work. A property that looks attractive at first glance can quietly destroy wealth when you factor in vacancy, maintenance, and rising expenses. Conversely, a "boring" duplex in a Midwest city might generate $400/month in cash flow that compounds into serious wealth over 20 years.
Consider this: a property with $2,000/month rent sounds great, but if your mortgage is $1,400, taxes $300, insurance $100, and maintenance averages $150, you're left with just $50/month before vacancy. That's a 2.5% vacancy rate wiping you out. Experienced investors target at least $200–$300/month per unit in net cash flow after all expenses, and a cash-on-cash return of 8–12% or higher.
This calculator is built for landlords analyzing their first property, seasoned investors comparing deals, and anyone using the BRRRR strategy who needs to know exact cash flow before refinancing.
How It's Calculated
The core formulas used in this calculator:
Gross Rental Income = Monthly Rent × 12
Effective Gross Income = Gross Income × (1 − Vacancy Rate)
NOI = Effective Gross Income − Annual Operating Expenses (excl. mortgage)
Annual Cash Flow = NOI − Annual Mortgage Payments
Cap Rate = NOI ÷ Purchase Price × 100
Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested × 100
Total Cash Invested = Down Payment + Closing Costs + Rehab
The 10-year projection compounds rent at your specified annual growth rate and expenses at the annual expense growth rate. Property value appreciates at your chosen appreciation rate each year.
Tips & Common Mistakes
- Don't underestimate maintenance. A common rule is to budget 1% of property value per year for repairs — for a $250,000 home, that's $208/month. Many new landlords skip this and get surprised by a $5,000 HVAC replacement.
- Always include a vacancy allowance. Even great properties sit empty during tenant turnover. A 5–8% vacancy rate (roughly 3–5 weeks per year) is realistic for most markets.
- Cap rate measures the deal, not your financing. Cap rate tells you how productive the property is independent of debt. Cash-on-cash tells you how efficiently you're using your own money.
- Property management changes the math. If you ever hire a manager (typically 8–10% of rent), your cash flow drops significantly. Model it now even if you self-manage.
- Positive cash flow isn't the whole story. Appreciation, mortgage paydown (equity buildup), and tax benefits (depreciation) are additional return components not captured in cash flow alone.
Frequently Asked Questions
What is a good cash-on-cash return for a rental property?
Most experienced real estate investors target a cash-on-cash return of 8–12% or higher. Returns below 6% may not justify the illiquidity and management effort compared to other investments. However, in high-appreciation markets like coastal cities, investors often accept lower cash flow in exchange for stronger long-term appreciation.
What's the difference between NOI and cash flow?
Net Operating Income (NOI) is calculated before debt service — it excludes your mortgage payment. Cash flow subtracts the mortgage payment from NOI. Lenders use NOI to evaluate a property's profitability independently of financing, while cash flow tells you how much money actually hits your bank account each month.
How is cap rate used to compare properties?
Cap rate (capitalization rate) lets you compare properties regardless of how they're financed. A higher cap rate generally means more income relative to the purchase price. In competitive markets, cap rates of 4–6% are common; in smaller cities, 7–10% cap rates are achievable. Always compare cap rates within the same market and property type.
Should I include appreciation in my analysis?
Yes, but treat it as a bonus, not a requirement. Relying on appreciation to make a deal work is speculative. Build your investment case on cash flow and NOI first — appreciation is the upside that can significantly accelerate wealth over 10–20 years, but it's not guaranteed.