Rental Property Calculator

How this result is built

Project rental cash flow, cap rate, and equity after a holding period with appreciation.

A rental has a cash-flow year and a sale year. This calculator does both. Operating income and the mortgage payment describe the year you live through. Appreciation and the remaining loan balance describe what you would walk away with if you sold.

What the opening example is for

Appreciation is an assumption you type, not a forecast the page invents. Set it to zero if you want the deal to stand on rent alone.

The walkthrough below uses the numbers already sitting in Rental Property Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Purchase price” line on Rental Property Calculator starts at $400,000.00. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Rental Property Calculator treats “Monthly rent” as its own entry, and the form opens with $2,800.00. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

Before you replace it, “Yearly operating expenses” reads $11,000.00 on Rental Property Calculator. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Look at “Down payment” first if you are checking Rental Property Calculator: the filled value is $80,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The remaining fields

The “Loan rate” line on Rental Property Calculator starts at 6.80%. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Rental Property Calculator treats “Loan term” as its own entry, and the form opens with 30. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

Before you replace it, “Years you plan to hold” reads 7 on Rental Property Calculator. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Look at “Annual appreciation” first if you are checking Rental Property Calculator: the filled value is 3%. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The opening result, line by line

Press Calculate on the opening form and Cap rate is 5.65%. That is the number the rest of this section is talking about.

Net operating income is $22,600.00 when you run the opening figures on Rental Property Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, annual debt service is $25,033.93. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Rental Property Calculator reports that cash flow after debt is -$2,433.93. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Cash-on-cash return is -3.04% when you run the opening figures on Rental Property Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

On this opening pass, value after hold is $491,949.55. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Rental Property Calculator reports that loan balance then is $290,753.15. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Equity before selling costs is $201,196.39 when you run the opening figures on Rental Property Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Cap rate ignores financing. Cash-on-cash includes the loan and the cash you put in.

A second pass changes only “Purchase price”, from $400,000.00 to $440,000.00. Cap rate moves from 5.65% to 5.14%. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on Rental Property Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

Rental Property Calculator does not know your credit score, the county’s tax bill, or what an appraiser will say. Type the price, the loan, and the escrow you were quoted. Compare the payment with the loan estimate, and treat a small rounding difference as normal.

Rental Property Calculator stops at its own formula. When the next question is different, open Real Estate Calculator (Cap rate and cash-on-cash from rent and expenses.); ROI Calculator (Total ROI and the annualized rate.); Mortgage Calculator (Principal, interest, tax, insurance, PMI, and HOA in one payment.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on Rental Property Calculator by reading the labels, not the headline. The opening labels are Purchase price ($400,000.00), Monthly rent ($2,800.00), Yearly operating expenses ($11,000.00), Down payment ($80,000.00), Loan rate (6.80%), Loan term (30), Years you plan to hold (7), Annual appreciation (3%). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on 5.65%. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. Rental Property Calculator is built for one job: Cash flow now and equity at the end of the hold. The description on the page says the same thing in a sentence: Project rental cash flow, cap rate, and equity after a holding period with appreciation.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, Rental Property Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read 5.65% as the output of the fields above and nothing else.

FAQs