See whether a rental actually makes money before you buy. Enter the purchase price, your financing, the rent, and your operating costs — and get your cash-on-cash return, cap rate, and monthly cash flow.
Estimate only — a screening tool, not investment advice. It ignores appreciation, loan paydown, tax benefits, and closing-cost financing. Confirm real taxes, insurance, and rents before you buy.
Price alone tells you nothing about whether a rental is a good investment. Two ratios do the real work:
Cap rate = (Rent − Operating expenses) × 12 ÷ Price · Cash-on-cash = Annual cash flow ÷ (Down payment + Closing costs)
The fastest way to fool yourself is counting only rent minus mortgage. Real operating expenses include property taxes, insurance, maintenance, property management (~8–10% of rent even if you self-manage today), and a vacancy allowance (~5–8%). Leave those out and a "positive" deal can quietly lose money.
Almost every argument about whether a rental is a "good deal" is really an argument about which denominator you divided by. Cap rate divides net operating income by the purchase price and deliberately ignores how you paid for the property, which makes it a clean way to compare one building against another in the same market. Cash-on-cash return divides the cash the property actually hands you each year by the cash you actually handed over, which makes it the number to compare against anything else you could do with that money. A property has exactly one cap rate and as many cash-on-cash returns as there are ways to finance it. When someone quotes you a return without saying which one, they have told you almost nothing.
The calculator opens on a $250,000 property, 20% down, a 7% loan over 30 years, $8,000 of closing and upfront costs, $2,200 of monthly rent and $700 of monthly operating expenses. The down payment is $250,000 × 0.20 = $50,000, so the loan is $200,000. At 7% nominal that is 0.5833% a month over 360 payments, and the amortisation formula gives a payment of $1,330.60.
Now both returns. Net operating income stops before the mortgage: ($2,200 − $700) × 12 = $18,000 a year, and $18,000 ÷ $250,000 = 7.2% cap rate. Monthly cash flow continues past it: $2,200 − $700 − $1,330.60 = $169.40, or $2,032.74 a year. Total cash in is $50,000 + $8,000 = $58,000, so cash-on-cash is $2,032.74 ÷ $58,000 = 3.5%. The cap rate looks like a solid buy. The cash-on-cash return is worse than a savings account, and the difference is entirely the $15,967 of mortgage payments the cap rate never saw.
Many investors screen for cash-on-cash somewhere around 8% or better, on the reasoning that money tied up in a single illiquid asset should beat a passive index. That is a convention, not a law, and it moves with rates: the same threshold was easy to clear at 4% mortgages and is hard at 7%. On these defaults, holding everything else constant, rent would have to reach roughly $2,417 a month to produce an 8% cash-on-cash return, and anything below $2,030.60 means you are feeding the property every month. Lenders apply their own test: debt service coverage here is $18,000 ÷ $15,967 = 1.13, below the 1.20–1.25 most DSCR lenders want, so this deal may not finance on the terms assumed. And the old 1% screen would have caught it in ten seconds — 1% of $250,000 is $2,500 of rent, and this property produces $2,200.
It is the operating expense line, and it is almost always too low. The $700 default is 31.8% of rent, which is plausible only if taxes are modest, you self-manage, and nothing breaks. The widely used 50% rule assumes operating costs plus reserves eat half of gross rent over a long enough hold, because it counts the things that do not bill monthly: vacancy between tenants, a roof, a water heater, turnover paint and carpet, the management fee you will eventually want to pay. Re-run this deal at $1,100 of expenses and cash flow goes to −$230.60 a month and cash-on-cash to −4.8%. The same property, the same rent, one honest assumption — and it is a loss. Two smaller errors ride along with it: treating appreciation as part of the return when it is a hope rather than a cash flow, and forgetting that principal paydown is real wealth this calculator deliberately excludes.
A single-screen tool answers "does this one deal clear my bar at today's assumptions." It cannot hold a capital reserve schedule, a vacancy assumption that varies by year, depreciation and its recapture, or a side-by-side of four properties you are choosing between. That is the point at which a model earns its keep — the Rental Property Deal Analyzer carries the multi-year view and the tax lines, and the Landlord Command Center tracks what the property actually did once you own it, which is the only way to find out whether your expense assumption was honest.
Many investors target 8%+ cash-on-cash, though it varies by market and strategy — appreciation-focused buyers accept less, cash-flow buyers want more. The point of this calculator is to see the number honestly before you buy, not to hit a magic figure.
Cap rate ignores your loan — it's the property's return if you paid all cash — so it's best for comparing properties. Cash-on-cash includes your financing and shows the return on the actual cash you invested. A leveraged deal often has a lower cap rate but a higher cash-on-cash return.
No. Operating expenses are taxes, insurance, maintenance, management, and vacancy — the costs of running the property. The mortgage is a financing cost; this calculator handles it separately so your cap rate stays comparable across deals.
Related: break-even calculator · Rental Property Deal Analyzer · Landlord Spreadsheet.
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Yes. The Real Estate ROI Calculator is completely free, runs in your browser, and never asks for a signup, email, or download. Enter your numbers and the result updates instantly.
It uses standard formulas and recalculates the moment you change a value, so the math is exact for the inputs you enter. Treat the result as a reliable planning estimate; for decisions with legal or tax consequences, confirm the figures with a qualified professional.
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Last reviewed: September 2026. Free to use, no signup — Real Estate ROI Calculator by ToolWise Digital.
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