Estimate rental property cash flow, cap rate, and cash-on-cash return from purchase price, down payment, mortgage terms, rent, and operating cost assumptions.
Formula
Monthly NOI = Monthly rent - Monthly operating expenses
Cap rate = Annual NOI / Purchase price
Cash-on-cash return = Annual cash flow / Down payment
Result
Annual NOI of $16,800.00 supports a 5.6% cap rate, while the financed deal produces a -2.34% cash-on-cash return.
Rental property return sheet
| Measure | Value |
|---|---|
| Property price | $300,000.00 |
| Down payment | $60,000.00 |
| Loan amount | $240,000.00 |
| Monthly rent | $2,000.00 |
| Monthly expenses | $600.00 |
| Monthly NOI | $1,400.00 |
| Monthly mortgage | $1,516.96 |
| Annual debt service | $18,203.56 |
| Annual cash flow | -$1,403.56 |
| Annual NOI | $16,800.00 |
| Gross yield | 8% |
| Cap rate | 5.6% |
| Cash-on-cash return | -2.34% |
How to read this result
Cap rate helps you compare the property's income yield before financing, while cash-on-cash return shows what your actual invested cash earns after debt service.
This simplified worksheet does not separate taxes, insurance, vacancy, reserves, closing costs, or depreciation, so use the result as a screening pass rather than a final underwriting model.
Real Estate Investing
A rental property calculator helps investors screen a deal before they open a spreadsheet or ask a lender for a full underwriting package. It turns purchase price, down payment, mortgage terms, rent, and operating assumptions into monthly cash flow, annual NOI, cap rate, and cash-on-cash return so you can compare one property with another on the same basis.
This calculator keeps the model intentionally focused. It estimates how much rent is left after operating expenses, how much mortgage debt service the property carries, and what the deal produces after financing is added back into the picture.
That makes the page useful when you are comparing rental houses, small multifamily deals, or other income properties and want a quick answer on whether the numbers look investable.
The metrics answer different questions. Monthly and annual cash flow show what is left after expenses and debt service. Cap rate strips financing back out and compares annual net operating income with the purchase price. Cash-on-cash return goes one step further and compares annual cash flow with the actual cash you put into the deal.
That is why the same property can look strong on cap rate but weak on cash-on-cash return if the mortgage is expensive, the down payment is large, or operating costs are underestimated.
Monthly NOI = Monthly rent - Monthly operating expenses
Measures how much of the rent remains after the operating cost assumption is applied.
Annual NOI = Monthly NOI x 12
Annualizes the property-level income before debt service.
Cap rate = Annual NOI / Purchase price
Shows the unlevered income yield of the property.
Cash-on-cash return = Annual cash flow / Down payment
Shows the levered return on the cash you actually invested.
Further reading
If you buy a 300,000 property with 20% down, a 30-year loan at 6.5%, 2,000 in monthly rent, and operating expenses equal to 30% of rent, the calculator shows a negative monthly cash flow because the mortgage payment is larger than the property keeps after expenses.
At the same time, the deal still has a measurable cap rate because the property itself produces positive NOI before financing. That is the difference between property-level yield and investor-level return. Use both views when you compare listings, not just one number on its own.
This worksheet does not split expenses into taxes, insurance, vacancy, repairs, reserves, or property management fees. Instead, it uses one operating expense percentage so you can screen a deal quickly without building a full pro forma first.
If you need a deeper pass, compare the result with a dedicated cap rate calculator, a cash-on-cash calculator, or a property management cost calculator before you rely on the numbers for a final offer or refinance decision.
Further reading
Frequently asked questions
Start with monthly rent, subtract operating expenses, then subtract the mortgage payment. The result is monthly cash flow. Multiply that number by 12 to get annual cash flow.
Cap rate is annual NOI divided by property value or purchase price. It measures the property's unlevered income yield, so mortgage terms do not change the cap rate itself.
No. Cap rate ignores financing and looks only at the property. Cash-on-cash return includes debt service and compares annual cash flow with the cash you actually invested.
Use a realistic operating expense estimate for the property type and market. If you do not have a full pro forma, start with a conservative percentage and refine it once you have taxes, insurance, repairs, and management details.
No. It uses one operating expense percentage instead of separate line items. That keeps the tool fast for screening, but it also means the result is only as good as the expense assumption you enter.
Because cap rate is unlevered and cash flow is levered. A property can produce enough NOI to look fine on cap rate but still have weak investor cash flow once mortgage payments are added.
There is no single right answer, but many investors want a return that clears their alternative uses of capital and their risk tolerance. Use the number to compare deals rather than to chase one universal target.
Also in Mortgages
Related
These related calculators come from the same leaf category, nearby sibling categories, or the same top-level topic.
Calculate cap rate, NOI yield, implied property value, target NOI gap.
Calculate rental-property cash-on-cash return from annual pre-tax cash flow, invested cash, vacancy, expenses, reserves, debt service, DSCR.
Estimate rental-property GRM from price and rent, or reverse the same market multiple to solve implied value or required rent.
Estimate property NOI from scheduled rent, other income, vacancy, operating expenses, and either percentage-based or fixed management costs.
