Rental property calculator: what the house actually pays you
Put in the price, the loan, the rent and every cost. You get monthly cash flow, NOI, cap rate, cash-on-cash, the lender's DSCR next to the NOI version, and the 1% rule.
Paper thin under 5% of rent
Cash flow per month
$55
$2,600 of rent leaves $1,589 a month after vacancy and operating costs. After the $1,535 mortgage payment, $55 is yours.
- Net operating income / yr
- $19,073
- Cap rate
- 6.36%
- Cash-on-cash return
- 0.78%
- Cash invested
- $84,000
- Loan amount
- $225,000
- Principal and interest / mo
- $1,535
- DSCR, lender's test
- 1.29x
- DSCR, NOI basis
- 1.04x
- Rent-to-price (1% rule)
- 0.87% misses
- Operating costs / yr
- $10,567
Lender's test: gross monthly rent divided by principal, interest, taxes, insurance and HOA (PITIA), the way a 1-4 unit DSCR lender qualifies the loan. NOI basis: net operating income divided by annual debt service, after vacancy, repairs and management.
The method
The calculator works top-down, the way an appraiser or a commercial lender reads a rent roll, then adds the 1-4 unit lender's test beside it.
- Income collected = monthly rent × 12, less the vacancy percentage.
- Operating costs = taxes + insurance + HOA + owner-paid utilities + repairs and capex (a share of gross rent) + management (a share of rent collected).
- NOI = income collected minus operating costs. No mortgage in it.
- Cash flow = NOI minus 12 months of principal and interest.
- Cap rate = NOI / price. Cash-on-cash = annual cash flow / (down payment + closing costs).
- Lender's DSCR = monthly rent / PITIA. NOI DSCR = NOI / annual principal and interest.
The stamp reads "Negative" when the property loses money after every cost, "Won't qualify" when the lender's ratio is under the 1.05x minimum, and "Paper thin" when cash flow is under 5% of rent. On a $2,600 rental that line is $130 a month, which one plumber visit can wipe out.
When the two DSCRs disagree
The example is the common case: 1.29x to the lender, 1.04x after real costs. The loan closes, and you own a property that breaks even. If you want the gap smaller, the levers are a bigger down payment, a lower rate or a cheaper insurance policy. To see how large a loan the rent supports at 1.05x, use the DSCR calculator. To see the terms, go to DSCR loans, or send us the deal.
Questions people ask
How do you calculate cash flow on a rental property?
Take the rent you actually collect, subtract operating costs to get net operating income (NOI), then subtract the mortgage payment. In the example, $2,600 of rent less 5% vacancy is $2,470 collected. Taxes, insurance, repairs and management come to $880.60 a month, leaving $1,589.40 of NOI. The $1,534.90 payment takes almost all of it, so the cash flow is $54.50 a month.
Why does the calculator show two DSCR numbers?
Because lenders and investors measure different things. A 1-4 unit DSCR lender divides gross rent by PITIA (principal, interest, taxes, insurance, HOA) and ignores vacancy, repairs and management: $2,600 / $2,009.90 = 1.29x, which clears the 1.05x minimum easily. The NOI version divides NOI by the mortgage payments: $19,072.80 / $18,418.76 = 1.04x. The first decides whether you get the loan. The second tells you whether the property pays for itself.
What is the 1% rule, and should I use it?
It says monthly rent should be at least 1% of the price. $2,600 on a $300,000 house is 0.87%, so the example misses. It is a quick screen for listings, nothing more: it ignores taxes, insurance and the rate on your loan, which is why the calculator runs the full numbers next to it.
What is a good cash-on-cash return?
One that beats what the same cash would earn with no work and no risk. The example earns $654 a year on $84,000 invested ($75,000 down plus $9,000 of closing costs), or 0.78%. Below a savings account, that deal only works if you are betting on rent growth and appreciation, and you should know that is the bet.
How much should I budget for repairs and capex?
Enough to replace the roof, the water heater and the HVAC before they fail, plus the small calls in between. The 8% of rent in the example is $208 a month. An older house, a cheap house with high-wear tenants or a house you have not inspected deserves more; a new build can carry less for the first few years.
Numbers look right?
Send the deal. We check it against the lender's terms and come back with a loan.