Rental Property Calculator – Estimate Yield and Cash Flow
Estimate rental income, expenses, cash flow and total return on a rental property.
About the Rental Property Calculator
What is the Rental Property Calculator?
A rental property calculator estimates the income, expenses and returns of a rental, including vacancy and financing.
Why use this calculator?
Before buying an investment property, you need to know whether it produces positive cash flow and what return it offers on your invested cash.
How to use it
- Enter the price, down payment and mortgage rate.
- Enter expected monthly rent and a vacancy allowance.
- Enter operating expenses such as taxes, insurance and maintenance.
Formula
Effective rent = rent × (1 − vacancy); cash flow = effective rent − expenses − mortgage.
Excludes closing costs, capital expenditures and income taxes. Add a maintenance reserve for larger repairs.
Frequently Asked Questions
What expenses should I include?
Property taxes, insurance, maintenance, repairs, property management, HOA fees, utilities if you pay them, and a vacancy allowance.
What is the 1% rule?
A rough screen that monthly rent should be at least 1% of the purchase price. It is a starting filter, not a full analysis.
What is compound interest?
Compound interest is interest earned on both your original money and on previously earned interest. Over time it can make savings grow much faster than simple interest.
What is the difference between nominal and effective return?
The nominal return ignores compounding within the year, while the effective (annualised) return accounts for it. The effective figure is usually higher and better reflects real growth.
How does inflation affect my returns?
Inflation erodes purchasing power. The real return is the nominal return minus inflation, so an investment can grow in dollars yet still lose value in what it can buy.
What rate of return should I assume?
A common long-term assumption for a diversified stock portfolio is about 6% to 8% per year after inflation, but returns vary and are never guaranteed.
Does this account for taxes and fees?
Unless stated, the tool shows pre-tax, pre-fee growth. Subtract your fund expense ratio and expected tax rate to estimate what you keep.
What is included in a monthly mortgage payment?
Most payments combine principal, interest, property taxes and homeowners insurance (often called PITI). Some loans also include private mortgage insurance (PMI).
What is PMI and when can I drop it?
Private mortgage insurance is usually required when your down payment is under 20%. You can typically request removal once you reach 20% equity.
Fixed versus adjustable rate — which is better?
A fixed rate keeps the same interest rate for the whole term, giving predictable payments. An adjustable rate starts lower but can rise after the initial period.