Effective gross income
Gross scheduled income = (monthly rent + other monthly income) × 12
Effective gross income = gross scheduled income × (1 − vacancy rate)
Rental Property Calculator – Cash Flow, Cap Rate and Cash-on-Cash Return
Property assumptions
Estimated first-year results
The example is calculated when the page loads. Change any assumption and select Calculate returns.
Monthly cash flow
Annual cash flow
Cap rate
Cash-on-cash return
Net operating income
Monthly mortgage P&I
| Annual calculation | Amount |
|---|---|
| Gross scheduled income | — |
| Less vacancy / collection loss | — |
| Effective gross income | — |
| Less operating expenses | — |
| Net operating income (NOI) | — |
| Less mortgage debt service | — |
| Less capital reserve | — |
| Pre-tax cash flow | — |
Loan amount—
Initial cash invested—
Loan-to-value—
DSCR—
Operating expense ratio—
Down payment—
P&I means mortgage principal and interest. Income tax, depreciation, appreciation, sale proceeds and future rent or expense changes are not modeled.
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How to use this rental property calculator
- Enter the price, down payment, buyer closing costs, upfront repairs and fixed-rate loan assumptions.
- Add expected monthly rent, other property income and a realistic vacancy or collection-loss allowance.
- Enter the operating costs the owner pays. Keep one-off purchase work in upfront repairs and ongoing replacements in the capital reserve.
- Select Calculate returns to estimate first-year NOI, cash flow, cap rate, cash-on-cash return and DSCR.
- Stress-test the result with lower rent, higher vacancy and higher expenses. Copy the summary or download the calculation as CSV for your records.
Consistent periods matter: rent and some expenses are entered monthly, while property tax and insurance are entered annually. The breakdown converts everything to annual figures before calculating returns.
Rental property formulas
Net operating income (NOI)
NOI = effective gross income − operating expenses
Operating expenses include entered property tax, insurance, management, maintenance, HOA/service charge, owner-paid utilities and other operating costs. Mortgage payments, income tax, depreciation and the separately entered capital reserve are excluded from this calculator’s NOI.
Cap rate
Acquisition cap rate = NOI ÷ purchase price × 100
This is an unlevered, first-year income measure. A current-market cap rate would use current property value instead of the original purchase price.
Cash flow and cash-on-cash return
Pre-tax cash flow = NOI − annual debt service − annual capital reserve
Cash-on-cash return = annual pre-tax cash flow ÷ initial cash invested × 100
Initial cash invested equals down payment plus entered buyer closing costs and upfront repairs.
Mortgage payment
For a positive fixed rate, monthly principal and interest is P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r is the monthly rate and n is the number of monthly payments. At 0% interest, payment is P ÷ n.
Debt service coverage ratio
DSCR = NOI ÷ annual mortgage debt service
DSCR is not shown for a cash purchase. Lenders may use different income, reserve and debt-service definitions, so this estimate may not match underwriting.
How to interpret the results
Cash flow shows spendable income
Positive cash flow means the modeled income exceeds operating expenses, mortgage payments and the entered capital reserve. It does not guarantee that every month will be positive; repairs and vacancies are uneven.
Cap rate separates the property from financing
Because cap rate uses NOI before debt service, two buyers using different loans can calculate the same acquisition cap rate from the same property assumptions. Compare it with similar properties in the same market and condition.
Cash-on-cash return includes leverage
A smaller down payment can raise or lower cash-on-cash return because it changes both invested cash and debt service. The metric does not include equity gained through principal repayment or price appreciation.
Stress tests are more useful than one forecast
Recalculate with lower achievable rent, additional vacancy, higher maintenance and realistic management. Review leases, local taxes, insurance quotes, building condition and financing documents rather than relying on a single estimate.
Assumptions, sources and limits
Author: Starlight Tools Editorial Team. Reviewed by: Starlight Tools Calculation Review Team. Last reviewed: 31 July 2026.
Method: This is a static first-year pro forma. Management fees are applied to effective gross income after the vacancy allowance. The loan is modeled as a fixed-rate, fully amortizing mortgage with monthly payments. Money is displayed to two decimal places and percentages to two decimal places; calculations retain JavaScript floating-point precision.
References: Fannie Mae defines NOI as effective gross income minus operating expenses. Freddie Mac explains the relationship between NOI, value and capitalization rate. The IRS lists common residential rental income and expense considerations. Virginia Tech’s real-estate glossary describes cash flow and cash-on-cash return.
Limits: Actual results can differ because of rent collection, timing, variable rates, fees, escrow, lender rules, taxes, depreciation, personal use, local law, major repairs, improvements, refinancing and sale outcomes. This calculator is for general information and is not financial, investment, tax, legal, valuation, lending or property advice. Verify figures and tax treatment with qualified local professionals before acting.
Rental property calculator FAQ
How is rental property cash flow calculated?
This calculator estimates effective gross income after vacancy, subtracts operating expenses to find NOI, then subtracts annual mortgage debt service and the entered capital reserve. The remainder is pre-tax cash flow.
What is net operating income (NOI)?
NOI is effective gross property income minus operating expenses. Here, mortgage principal and interest, income tax, depreciation and the separate capital reserve are excluded from NOI.
How is cap rate calculated?
Acquisition cap rate equals annual NOI divided by purchase price, multiplied by 100. It is a first-year property-income measure before financing.
How is cash-on-cash return calculated?
Cash-on-cash return equals annual pre-tax cash flow divided by initial cash invested, multiplied by 100. This tool counts the down payment, entered closing costs and upfront repairs as initial cash.
Does cap rate include mortgage payments?
No. Cap rate uses NOI before debt service. Financing affects cash flow, cash-on-cash return and DSCR instead.
Does this calculator include taxes and depreciation?
It includes entered property tax as an operating expense, but does not estimate income tax, tax deductions, depreciation, capital gains, depreciation recapture or transaction-specific tax treatment.
What is DSCR?
Debt service coverage ratio is NOI divided by annual mortgage debt service. A higher ratio means more modeled property income is available relative to loan payments, but lender definitions and requirements vary.
What should I enter for vacancy?
Use a realistic allowance for unoccupied time, nonpayment and collection loss based on the property and local market. Test a more conservative rate because occupancy changes.
Can I use this for a cash purchase?
Yes. Set the down payment equal to the purchase price. Mortgage payment and DSCR will show as not applicable, while the other metrics still calculate.