Rental Property ROI Calculator
Analyze a rental property's return on investment — net operating income (NOI), cap rate, cash-on-cash return, monthly/annual cash flow and gross rent multiplier, from purchase price, financing terms, rent and operating expenses.
Input
Purchase & Financing
Ignored for an all-cash purchase (100% down).
Upfront cash beyond the down payment (closing costs, repairs). Added to cash invested.
Rental Income
Gross monthly rent collected from the property.
Expected percent of the year the unit sits empty.
Operating Expenses
Optional. Annual HOA dues or other fixed costs.
Percent of collected rent paid to a property manager. Use 0 if self-managed.
Percent of collected rent reserved for maintenance & repairs.
Output
| Metric | Value |
|---|---|
| No data yet | |
This calculator provides estimates for informational purposes only and does not constitute financial or investment advice. Actual taxes, insurance, financing terms and rental income vary by property and location.
Guides
Run the numbers on a rental property before you buy it. This calculator combines a standard mortgage payment (the same amortization math used for a home loan) with a rental income and expense breakdown to produce the metrics real-estate investors compare deals on: NOI, cap rate, cash-on-cash return, monthly and annual cash flow, and the gross rent multiplier.
The metrics, defined
- Net Operating Income (NOI) — annual income after operating expenses but before the mortgage:
NOI = Effective Gross Income − Operating Expenses. Effective Gross Income is gross annual rent minus a vacancy allowance. Operating expenses cover property tax, insurance, HOA dues, management and maintenance — mortgage principal & interest is deliberately excluded, so NOI measures the property's own performance independent of financing. - Cap Rate — NOI divided by purchase price:
Cap Rate = NOI ÷ Purchase Price. The quickest way to compare properties at different price points on a financing-independent basis. Higher generally means more return for more risk; lower usually means a more stable asset. - Cash-on-Cash Return — your actual return on the cash you put in:
Cash-on-Cash = Annual Cash Flow ÷ Total Cash Invested(down payment plus closing/rehab costs). Unlike cap rate, this reflects leverage — the same property can show a very different number depending on your down payment and loan rate. - Cash Flow — what's left after the mortgage:
Cash Flow = NOI − Annual Mortgage Payment (principal & interest). Negative cash flow means the property costs you money every month even while it may still build equity. - Gross Rent Multiplier (GRM) — a rough screening ratio:
GRM = Purchase Price ÷ Gross Annual Rent. Lower generally means the price is cheap relative to the rent; it's a fast first-pass filter, not a substitute for cap rate or cash flow.
How to use it
- Enter the purchase price, down payment (dollar amount or percentage — 100% for an all-cash purchase), loan interest rate and term, and any closing or rehab costs.
- Enter the monthly rent and a realistic vacancy rate (percent of the year the unit sits empty between tenants).
- Fill in operating expenses — annual property tax, insurance, HOA if any, and management/maintenance as a percentage of collected rent (0% management if you self-manage).
- The results table updates instantly with loan amount, monthly mortgage payment, NOI, cap rate, monthly/annual cash flow, cash-on-cash return, gross rent multiplier and total cash invested.
FAQ
Why exclude the mortgage payment from NOI? NOI measures how the property itself performs, independent of financing — that's what lets you compare an all-cash deal against a leveraged one on the same basis. The mortgage comes back in the cash flow and cash-on-cash figures, which do reflect financing.
Why is my cash flow negative even though NOI is positive? Annual debt service exceeds NOI — common with a smaller down payment, a higher rate, or a price that's high relative to rent. A bigger down payment or a lower rate directly improves cash flow by shrinking the loan and its payment.
Does the vacancy rate actually matter? Yes — it directly reduces effective gross income and therefore NOI, cap rate and cash flow. A 0%-vacancy assumption looks better on paper than it performs in practice; 5-8% is a common starting estimate.
Privacy
All calculations run locally in your browser — nothing you enter here is sent to a server or stored.