Rental Property Calculator

This calculator screens a rental property’s monthly operating cash flow. It subtracts the monthly mortgage payment and the monthly expenses you enter from monthly rent: cash flow = rent − operating expenses − mortgage payment. The mortgage amount is property price minus down payment, and the payment uses the fixed-rate level-payment formula over the selected term. The result is before income tax and before any appreciation or sale proceeds. Enter a purchase price and down payment to define the modeled loan. Enter rent as the amount you expect to collect in a normal month, not a gross annual headline. Enter expenses as a monthly reserve for the costs you want the scenario to carry. Property tax, insurance, vacancy, repairs, utilities, management, licensing, accounting, and capital replacements are not automatically known to the calculator. Include them in expenses or run separate conservative cases. If an expense is annual, divide it by twelve before entering it. The mortgage payment is debt service, not the same thing as an operating expense. Principal repayment reduces the loan balance and may build equity, but it is still a cash payment. Interest is part of the financing cost. A property can have positive cash flow while producing a different taxable result, and a property can show paper appreciation without producing cash. The Internal Revenue Service explains rental income and deductible expenses in Publication 527; tax depreciation, passive-activity rules, and sale treatment are not calculated here. This page does not calculate cap rate or cash-on-cash return as separate outputs. You can derive a simple unlevered cap-rate scenario as annual net operating income ÷ purchase price, where annual net operating income excludes mortgage debt service. A simple cash-on-cash scenario is annual cash flow ÷ cash invested, but the denominator should include the down payment, closing costs, initial repairs, and other capital actually invested. These ratios are only meaningful when the same vacancy and expense assumptions are used consistently. Important exclusions are appreciation, vacancy timing, income tax, depreciation, sale costs, refinancing, insurance changes, and legal compliance. A lease, local rent rule, inspection report, and lender disclosure can change the economics. Use the mortgage calculator to inspect the loan, and use the house affordability calculator when the question is what price your income can support rather than whether a particular rental produces cash flow. Run base, conservative, and stress cases. Lower rent, a vacancy reserve, a major repair, higher insurance, or a higher renewal rate can change a positive result to a deficit. Save the assumptions and update them when rent, taxes, insurance, debt terms, or reserves change. This is a screening tool for transparent arithmetic, not investment, legal, or tax advice. Keep inspection reports, leases, financing disclosures, and tax records with the saved scenario. Recalculate after a rent change, insurance renewal, tax assessment, vacancy, major repair, or refinance offer. The output is strongest when every expense is supported by a quote, statement, historical average, or clearly labeled reserve. Also distinguish recurring operating costs from one-time acquisition and improvement costs. Keep closing costs, furnishing, permits, and initial repairs in cash invested when evaluating a return, even though they are not monthly operating expenses.