Calwarden

Real Estate Investment Calculator

Analyze rental property cash flow and ROI.

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Inputs

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$
$
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Results

Monthly Cash Flow
Cash on Cash ROI8.73%
Cap Rate7.68%

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Assumptions

  • Calculated locally from the inputs shown in this report.

Sensitivity preview

Purchase Price -10%: Monthly Cash Flow $400.00

Purchase Price Current: Monthly Cash Flow $400.00

Purchase Price +10%: Monthly Cash Flow $400.00

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About this Rental Property

Buying a rental property is a popular way to build wealth, but not every property is a good deal. This calculator helps you analyze the numbers to see if a property will generate positive cash flow.

How to use this calculator

  1. Enter the Purchase Price and Cash Invested (Down payment + Closing costs).
  2. Estimate the Monthly Rent.
  3. Calculate Operating Expenses (Prop management, taxes, repairs, vacancy).
  4. The tool calculates Cash Flow, Cap Rate, and Cash on Cash ROI.

Accuracy and testing

Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.

View accuracy page

How this calculator works

1. Cash Flow = Rent - (Mortgage + Expenses). 2. NOI (Net Operating Income) = (Rent - Operating Expenses) * 12. 3. Cap Rate = NOI / Purchase Price. 4. Cash on Cash Return = Annual Cash Flow / Total Cash Invested.

Inputs explained

Monthly Rent

The projected income from tenants. Check comparable listings (comps) in the area.

Operating Expenses

Costs to run the property: Taxes, Insurance, HOA, Maintenance, Vacancy reserve, and Property Management fees.

Cash Invested

The total money you put into the deal upfront. Down payment, closing costs, and immediate repairs.

Understanding your results

Positive Cash Flow means the property pays you every month. Cash on Cash ROI tells you how hard your money is working (8-12% is often a target). Cap Rate helps compare the property's unleveraged value to other local investments.

Example scenarios

Good Deal

Price $200k, Rent $2,000, Mortgage $1,000, Exp $500. Cash Flow = $500/mo ($6k/yr). If you invested $50k, Cash on Cash = 12%.

Negative Cash Flow

Price $400k, Rent $2,000, Mortgage $1,800, Exp $500. Cash Flow = -$300/mo. You lose money every month hoping for appreciation.

Key Features

  • Cash Flow Analysis
  • ROI Metrics (Cap Rate, CoC)
  • Expense Factor inclusion

Things to Keep in Mind

Does not calculate internal rate of return (IRR) based on future appreciation or tax benefits (depreciation).

Tips & Best Practices

  • The '1% Rule' is a quick filter: Monthly rent should be approx 1% of the purchase price (e.g. $200k home rents for $2k).
  • Always budget for vacancy (5-10%) and repairs (5-10%). Things break and tenants leave.
  • Don't forget Property Management fees (usually 10% of rent) if you don't plan to manage it yourself.

Glossary of Terms

NOI
Net Operating Income. Revenue minus all operating expenses (excluding mortgage).
Cap Rate
Capitalization Rate. A measure of unleveraged return. Helps compare properties irrespective of financing.
Cash on Cash
The annual return on the actual cash you invested.

Frequently Asked Questions

What is a good Cap Rate?
It depends on the market risk. Generally, 4-6% is common in safe, high-demand areas (Class A), while 7-10% is targeted in riskier or rural areas.
Why is Cash on Cash different from Cap Rate?
Cap rate measures the property's performance as if you bought it with cash. Cash on Cash measures your return on the specific down payment you made, accounting for the mortgage leverage.
Should I count principal paydown as return?
Principal paydown increases your net worth (equity), but it's not liquid cash flow. This calculator focuses on liquid cash flow.