What This Calculator Does

This calculator models a rental property's monthly and annual performance: the mortgage payment, the income after vacancy, the operating expenses, the net operating income, the cash flow after debt service, and the two return metrics investors watch most, cap rate and cash-on-cash return.

Who It's For

It is for anyone evaluating a rental purchase: first-time investors, buy-and-hold landlords, agents helping clients run quick numbers, and lenders checking a property's cash flow. It works for single-family rentals, condos, and small multifamily properties when you enter the property-specific numbers.

What Each Input Means

  • Purchase price: what you expect to pay for the property.
  • Down payment %: the share of the price you pay in cash; the rest is the loan amount.
  • Interest rate and loan term: the financing assumptions used to compute the mortgage payment.
  • Closing costs at purchase: your estimate of title, escrow, recording, and other purchase costs, used in the cash invested.
  • Gross monthly rent: the scheduled rent before vacancy and concessions.
  • Vacancy %: the share of rent you expect to lose to vacancies and turnover.
  • Property tax, insurance, HOA: the recurring monthly costs of ownership.
  • Property management %: what a manager would charge, typically a percentage of collected rent.
  • Maintenance and CapEx reserve: monthly allowances for repairs and for big future items like roofs and HVAC.
  • Other expenses: anything else, such as utilities, landscaping, or association fees not in the HOA input.

How the Calculation Works

  • Loan amount = purchase price minus the down payment.
  • Mortgage payment = standard amortizing payment at the entered rate and term.
  • Effective gross income = gross rent minus vacancy.
  • Operating expenses = tax + insurance + HOA + property management + maintenance + CapEx + other.
  • NOI = (effective gross income minus operating expenses) times 12.
  • Cash flow = effective gross income minus operating expenses minus mortgage payment.
  • Cap rate = annual NOI divided by purchase price.
  • Cash-on-cash = annual cash flow divided by total cash invested (down payment plus closing costs).

What the Output Means

A positive cash flow means the rent covers the operating costs and the mortgage. NOI is the property's operating income before debt, and cap rate expresses it as a return on the purchase price. Cash-on-cash measures the return on the cash you actually put in. Compare these numbers against your own targets and against other opportunities.

Common Questions

  • Should I include vacancy if I have a tenant already? Yes. Vacancy is a long-run reality for any rental, and modeling it keeps the estimate honest.
  • What if I pay cash? Set the down payment to 100% and the mortgage payment becomes zero; the cash flow then reflects a debt-free property.
  • Does this include income taxes? No. Tax treatment varies by investor and entity, and this calculator does not model it.

Limitations

The results are only as good as the inputs. Rent, vacancy, taxes, insurance, and maintenance vary by market and property. The calculator does not model income taxes, appreciation, depreciation, financing points, or changes over time. Lenders, appraisers, and tax professionals use their own methods and assumptions.

Related Viking Resources