Use this rental property ROI calculator to estimate average monthly cash flow and a simplified annual cash-on-cash return. Enter rent, financing and operating costs, then adjust vacancy and management fees to compare scenarios. Results are before income taxes and exclude several acquisition and ownership costs; the separate appreciation result uses a fixed hypothetical 3% increase, not a forecast.
This is a standalone property-planning tool outside our usual dog guides. It does not calculate cap rate or a complete investment return.
Select monthly or annual for each dollar input. Vacancy is the total unrented time in one year: 0.6 months equals 5% of a year. Leasing fees and ongoing management fees are added together; set either to zero if your agreement does not charge it. The preset values are editable examples, not market benchmarks.
The model converts each annual dollar input to a monthly amount, then calculates the following annual values. The monthly cash-flow result is the annual average; it does not show the timing of an empty month or a large repair.
Mortgage payments assume a fixed interest rate and a fully amortizing loan with monthly payments. A zero-interest loan divides principal by the number of payments; an all-cash purchase has no loan payment. Enter the contract interest rate, not APR: CFPB explains that APR also includes certain loan charges. Add taxes and insurance separately rather than entering a total escrow payment as the loan payment. A zero down payment produces no meaningful return percentage with this denominator, so those percentages show N/A.
For an illustrative $100,000 all-cash property, enter $1,000 monthly rent, one month of annual vacancy, $100 monthly property tax, $50 insurance, $0 HOA and $100 maintenance. Set the leasing fee to zero and the management fee to 10% of collected rent. These are invented inputs to demonstrate the arithmetic.
| Calculation | Annual amount |
|---|---|
| Collected rent: $1,000 × 11 months | $11,000 |
| Tax, insurance and maintenance: $250 × 12 | $3,000 |
| Management: 10% × $11,000 | $1,100 |
| Cash flow: $11,000 − $3,000 − $1,100 | $6,900 ($575 monthly average) |
| Simplified cash-on-cash: $6,900 ÷ $100,000 | 6.9% |
The fixed 3% illustration adds a hypothetical $3,000 property value gain, producing 9.9% when combined with cash flow and divided by purchase price. That gain may not occur and cannot pay expenses without a transaction or financing. With two vacant months instead, cash flow falls to $6,000 and the simplified cash-on-cash return becomes 6.0%.
The default 6.75% interest rate, 0.6 vacant months, $182 monthly maintenance and management values are scenario inputs. They do not establish today’s financing, typical tenant tenure or a sufficient repair reserve. Use a lender quote, tax bill, insurance quote and property-specific estimates. Compare a base case with more vacancy and higher repairs instead of relying on one percentage.
The return denominator includes only the down payment. Closing costs, initial repairs and cash reserves increase the cash committed to a real purchase and can lower its cash-on-cash return. The model also excludes major capital replacements, utilities, mortgage insurance, income taxes, depreciation, rent growth, sale costs and the equity gained through principal repayment. Add missing recurring costs to your separate analysis; do not treat the combined illustration as a complete profit forecast.
Cash flow and taxable rental income are different calculations. IRS Publication 527 covers U.S. rental income, expenses and depreciation. This calculator does not determine tax deductions or tax liability; use the applicable current guidance and qualified tax advice for your situation.
Does it calculate cap rate or NOI? No. The displayed results are cash flow, simplified cash-on-cash return and a separate hypothetical appreciation illustration. Mortgage payments are subtracted for cash flow, so the output is not NOI.
What does the vacancy input change? It reduces collected annual rent and the ongoing management fee based on that rent. Taxes, insurance, HOA and maintenance still continue during vacancy.
Is the fixed 3% appreciation a prediction? No. It is an illustration built into this tool. Property values can rise, stay flat or fall; evaluate rental cash flow separately.
Can I compare a financed purchase with an all-cash purchase? Yes, but compare dollars as well as percentages. Financing changes both loan payments and the down-payment denominator, while omitted closing costs and risks still matter.
Editorial note: This explanation was updated with AI assistance to describe the calculator’s formulas and limitations. The worked example is hypothetical, not an investment recommendation or evidence of actual returns.