How this rental property calculator works
The calculator builds a simple monthly operating statement for the property, the same way a lender or experienced investor would.
- Effective gross income = rent + other income − vacancy loss.
- Operating expenses = property tax + insurance + HOA + owner-paid utilities + maintenance + capital expenditures + management.
- Net operating income (NOI) = effective gross income − operating expenses. NOI ignores the mortgage.
- Cash flow = NOI − mortgage principal and interest.
From those numbers it also derives the cap rate (annual NOI ÷ purchase price), cash on cash return (annual cash flow ÷ down payment, closing costs and rehab), and DSCR (NOI ÷ annual mortgage payments).
Worked example
A $300,000 single-family rental bought with 25% down at 7.25% for 30 years has a loan of $225,000 and a principal-and-interest payment of about $1,535 a month. At $2,500 rent with 5% vacancy, $300 a month of tax, $125 of insurance and 18% of rent set aside for maintenance, capex and management, NOI is roughly $1,500 a month. That leaves a small negative cash flow, which is typical when rates are above 7%: the deal only works with a lower price, higher rent, or more cash down.
Don't skip these expenses
- Vacancy: even great rentals sit empty between tenants. 5% equals about 18 days a year; use 8% to 10% in soft markets.
- Maintenance and capex: new investors often budget nothing here, then a $9,000 roof wipes out two years of cash flow. 5% + 5% of rent is a common starting point; older homes need more.
- Management: even if you self-manage, include 8% to 10% so the deal still works if you hire a manager later.
What is good cash flow on a rental property?
Many investors look for at least $100 to $300 per door per month after all reserves, a cash on cash return of 8% or more, and a DSCR above 1.25. In expensive coastal markets investors often accept thinner cash flow in exchange for appreciation; in the Midwest and South, higher cash flow is easier to find. The right target depends on your goals, but a deal that only works with zero reserves for repairs is usually not a deal.
Frequently asked questions
What is the 50% rule for rental property?
Is cash flow the same as profit?
Should I include principal in expenses?
What DSCR do lenders require?
Last reviewed: 2026-10-09