Rental Property Calculator
A rental's monthly cash flow after the mortgage and every running cost, its cash-on-cash return and first-year ROI on the cash you put in.
Result…
How it's calculated
Loan = price × (1 − deposit %); payment = L × i ÷ (1 − (1 + i)^−n), i = rate ÷ 12 Rent collected = rent × (1 − vacancy %) NOI = rent collected + other income − management fee − running costs Cash flow = NOI − mortgage payment Cash invested = deposit + buying costs + repairs Cash-on-cash = yearly cash flow ÷ cash invested First-year ROI = (yearly cash flow + principal repaid) ÷ cash invested
Works out what a buy-to-let or rental property leaves you each month once the rent has paid the mortgage and the running costs: vacancy, the letting agent's fee, property tax, insurance, maintenance, HOA or service charges and anything else. Cash-on-cash return is that yearly cash flow as a share of the cash you put in (deposit, buying costs and repairs); the first-year ROI adds the part of the loan the rent pays off, which is wealth you build even when the cash flow is thin. It leaves out income tax, rises in value and rent, and selling costs. For whether a lender will count the rent as enough, use the DSCR calculator; for the return as if bought with cash, the cap rate calculator.
Your numbers, step by step
About the Rental Property calculator
This rental property calculator shows what a buy-to-let home or rental unit leaves you each month after the mortgage and every running cost. Enter the price, deposit, buying costs and any repairs before letting, the mortgage rate and term, the rent and other income, then vacancy, the management fee, property tax, insurance, maintenance, HOA or service charges and other costs. It works out the mortgage payment, the net operating income, the monthly and yearly cash flow, the total cash you put in, the cash-on-cash return, and a first-year ROI that adds the loan the rent pays off. Each step is shown with your numbers, so you can see which cost makes the difference. For the return before any loan, see the cap rate calculator; to check whether a lender will see enough cover, the DSCR calculator.
How to use it
- Enter the “Purchase price”, the “Deposit (down payment)” as a %, the “Buying costs” and any “Repairs before letting”.
- Enter the “Mortgage interest rate” and “Mortgage term”; a 100% deposit means a cash purchase with no payment.
- Enter the “Rent per month”, then the “Vacancy” and “Management fee” as percentages.
- Add the yearly tax, insurance and maintenance and the monthly HOA or service charge and other costs, then read the cash flow and returns.
Worked example
A 200,000 property bought with a 25% deposit, 5,000 of buying costs and 5,000 of repairs needs 60,000 of cash. The 150,000 loan at 6% over 30 years costs 899.33 a month. Rent of 1,800 a month plus 50 of other income, less 5% vacancy, a 10% management fee, 2,400 of tax, 900 of insurance and 1,500 of maintenance a year, a 100 HOA charge and 25 of other costs a month, gives a net operating income of 12,768 a year. That leaves a cash flow of 164.67 a month (1,976.09 a year): a 3.29% cash-on-cash return, or 6.36% first-year ROI once the loan paid off is counted.
Updated
Questions people ask
How do I calculate cash flow on a rental property?
Start with the rent you expect to collect after vacancy, add other income, subtract the management fee and every running cost, then subtract the mortgage payment. What is left each month is the cash flow.
What is cash-on-cash return?
The yearly cash flow divided by the cash you put in: the deposit, buying costs and repairs. It shows what your own money earns, unlike the cap rate, which assumes a cash purchase.
Why is first-year ROI higher than cash-on-cash return?
Part of each mortgage payment repays the loan, which adds to your equity even though it doesn't reach your pocket. The first-year ROI counts that repayment as part of the return.
What do people forget when working out rental returns?
Empty months, repairs and management are the usual ones. Leaving vacancy at 0% or skipping maintenance makes the cash flow look better than it will be.
Does this include tax and rises in property value?
No. It is the first year before income tax, at today's rent and costs, and leaves out growth in value and the cost of selling. Tax rules, letting rules and mortgage terms differ by country and lender, so talk to an accountant or financial adviser before you buy.