Rental Property Cash Flow Calculator
Purchase price, financing, rent, and honest expenses in; monthly cash flow, NOI, cap rate, and cash-on-cash return out, with the arithmetic shown at every step.
Management is applied to collected rent (after vacancy), the way managers actually bill; maintenance is applied to scheduled rent. Cash-on-cash counts the down payment only, so add closing and make-ready costs to your own cash figure for a stricter number. Estimates before income taxes, not financial advice.
General information, not financial, investment, or tax advice. Every market and property is different; verify estimates against your own quotes and records before acting on them.
What the calculator estimates
Cash flow is what a rental actually leaves in your pocket each month: rent that really arrives, minus the cost of operating the property, minus the mortgage payment. It is the number that decides whether a property carries itself or quietly bills you for the privilege of owning it.
Along the way the calculator reports the three figures investors quote at each other. NOI, the net operating income, is what the property earns before any financing. Cap rate is NOI against the purchase price, which lets you compare properties regardless of how each is financed. Cash-on-cash return measures the year’s cash flow against the cash you personally put in.
The formula, in order
The calculation runs top to bottom, and each line answers a different question. Collected rent haircuts the scheduled rent for vacancy. Operating expenses cover taxes, insurance, upkeep, management, and dues, but never the mortgage. NOI is what the building earns; cash flow is what you keep after the lender.
Collected rent = monthly rent × (1 − vacancy %)
Operating expenses = taxes/12 + insurance/12 + maintenance % × rent + management % × collected + HOA
NOI = collected rent − operating expenses
Cash flow = NOI − mortgage principal & interest
Cap rate = annual NOI ÷ purchase price
Cash-on-cash = annual cash flow ÷ down payment
A worked example
A $300,000.00 single-family rental, bought with 20% down on a 30-year loan at 7%, renting for $2,500.00 a month. Assumptions: 5% vacancy, $3,600.00 a year in taxes, $1,200.00 in insurance, 5% for maintenance, 8% management on collected rent, no HOA.
- Mortgage: $240,000.00 borrowed → $1,596.73 a month in principal and interest
- Collected rent: $2,500.00 × 95% = $2,375.00
- Operating expenses: $300.00 taxes + $100.00 insurance + $125.00 maintenance + $190.00 management = $715.00
- NOI: $2,375.00 − $715.00 = $1,660.00 a month, $19,920.00 a year
- Cash flow: $1,660.00 − $1,596.73 = $63.27 a month
- Cap rate 6.64% · cash-on-cash 1.27% on the $60,000.00 down payment
Reading the results
A thin first-year cash flow is not automatically a bad deal, and a fat one is not automatically good. The calculator is deliberately conservative: it ignores rent growth, principal paydown, appreciation, and tax treatment, all of which accrue to the owner. A property that clears its costs at today’s rent with honest expense assumptions has room to get better; one that only works with zero vacancy and zero maintenance does not.
Cap rate is the cleanest way to compare two properties because financing drops out of it. Cash-on-cash is the honest way to judge your own deal, since it measures the return on the money you actually parted with. Leverage stretches both directions: a mortgage shrinks early cash-on-cash while your equity quietly builds.
The old 1% screen, monthly rent at 1% of the purchase price, is worth a glance on the way in. This example sits at 0.83%, which is ordinary for today’s prices; the screen filters obvious losers, and the full arithmetic above decides the rest.
The numbers people fudge
Every disappointing rental was purchased with an optimistic spreadsheet. The usual suspects, in order of damage:
- Vacancy at zero. Even great units turn over; 5% to 8% is the honest range for most markets
- Maintenance at zero because the property is "new". Roofs, water heaters, and appliances age on schedule; 5% to 10% of rent is the working reserve
- Skipping management because you self-manage. Your hours are not free; price them in and be pleasantly surprised if you keep the fee
- Yesterday’s property taxes. Many counties reassess at the sale price, so look up the millage against what you are paying, not what the seller paid
- The seller’s insurance quote. Landlord policies price differently than owner-occupied ones; get your own quote before you close
Common questions
What is a good monthly cash flow for a rental property?
There is no universal number, but many investors look for somewhere between $100.00 and $300.00 per unit per month after honest expense assumptions. Thin cash flow can still make sense where appreciation, principal paydown, or rent growth is strong; negative cash flow means you are paying to hold the property and should know exactly why.
What is the difference between NOI and cash flow?
NOI is what the property earns from operations: collected rent minus operating expenses, before any mortgage. Cash flow is what is left after the mortgage payment. Two buyers of the same building see the same NOI and completely different cash flows depending on how each financed it.
Cap rate vs. cash-on-cash: which matters more?
They answer different questions. Cap rate values the property itself, so it is the tool for comparing deals and sanity-checking a price. Cash-on-cash rates your investment, because it counts your actual cash against the cash the deal returns. Buy on cap rate logic, then check the financing produces a cash-on-cash you can live with.
Is the 1% rule still realistic?
As a filter, yes; as a verdict, no. Rent at 1% of the purchase price is hard to find in appreciating markets, and plenty of sound deals sit below it while lousy ones can sit above it. Use it to decide which listings deserve the full calculation, not to decide what to buy.
Does the calculator account for taxes and appreciation?
No, deliberately. Results are pre-tax and exclude appreciation, rent growth, and the principal your tenants pay down, so the answer reflects the property carrying itself today. Those excluded factors usually improve the picture, which makes this a conservative baseline rather than a forecast.
What vacancy rate should I assume?
Start at 5%, which is about two and a half weeks a year, and push it toward 8% for markets with slow seasons or units that turn over often. Zero is the one number that is always wrong: even a tenant who renews for a decade eventually hands back keys.
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