Rental Property ROI Calculator
Analyze any rental property investment with a full financial breakdown — monthly cash flow, cap rate, cash-on-cash return, gross yield, and a 30-year projection with appreciation and rent growth.
| Year | Property value | Mortgage balance | Equity | Annual rent | Annual cash flow | Cumulative cash flow | Total return |
|---|
Understanding rental property metrics
Cap Rate (Capitalization Rate) = Net Operating Income ÷ Purchase Price. It measures a property’s return assuming you paid all cash. A cap rate above 6% is generally considered good, above 8% is excellent. Below 4% is typical in expensive coastal markets where appreciation is the primary return driver.
Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested. This measures the return on your actual cash outlay (down payment + closing costs). It’s the most important metric for leveraged investors. A CoC return above 8% is strong.
The 1% Rule: Monthly rent should be at least 1% of the purchase price for the property to likely cash flow. A $350,000 property should rent for at least $3,500/month. This rule breaks down in expensive markets — use this calculator for a more accurate analysis.