Rental Property Cash Flow Calculator

Cash-on-Cash Return vs. Cap Rate: What’s the Difference?

Cap rate measures the property itself: annual NOI divided by price, with financing completely ignored. Cash-on-cash measures you: annual pre-tax cash flow divided by the actual cash you put in (down payment, closing, rehab). Two investors can buy the same building and see different cash-on-cash returns because their loans differ, while the cap rate stays identical. Use cap rate to compare properties across markets, and cash-on-cash to decide whether the leveraged deal pays you for your risk.

The 50% Rule: A Quick Way to Estimate Rental Expenses

The 50% rule says roughly half of gross rent disappears into operating expenses — taxes, insurance, vacancy, maintenance, CapEx, and management — before you pay the mortgage. It is a screening shortcut, not a law, but it stops beginners from counting all the rent as profit. When you run this calculator and your operating expenses land far below 45% of income, double-check every input; something is usually missing. Turnover costs are the classic blind spot: a single repaint-and-floors turnover can cost a month or two of rent — our paint and wallpaper estimator sizes the paint side of that math in seconds.

Why You Must Budget for CapEx (Capital Expenditures)

Repairs fix what breaks; CapEx replaces what wears out on a schedule you cannot negotiate. A roof lasts 20–25 years, an HVAC 12–18, a water heater about 10. Divide each item’s replacement cost by its lifespan in months and you get its true monthly cost — that total is your CapEx reserve. Skipping it means your first roof silently eats five years of “profit.” When that HVAC day arrives, our room AC and mini-split BTU calculator helps you size the replacement correctly so you pay for capacity, not guesswork.

How to Verify Rent Comps Before Buying a Property

Never trust the listing’s pro-forma rent. Call three local property managers and ask what this exact property would rent for, and how long it would take to lease. Check current listings for comparable beds, baths, square footage, and condition within half a mile. Ask two local landlords if they know the building’s history. If the three quotes average below your model, rerun this calculator with the real number — the deal that disappears was never yours.

Self-Managing vs. Hiring a Property Manager: The True Cost

A property manager charges 8–12% of rent plus leasing fees, and buys you back your evenings, your distance, and usually better tenant screening. Self-managing keeps that money but costs real hours: marketing, showings, screening, repairs coordination, and collections — plus the emotional load of being someone’s landlord at 10 PM. A fair test: run this calculator at 10% management. If the deal only works when you donate your labor, you are buying a job, not an asset. Meanwhile, keep the property itself competitive — curb-appeal repairs pay in faster rent, and our deck and fence material calculator sizes exterior upgrades, while our home generator size calculator prices backup power, a listing feature renters increasingly ask about.