What This Calculator Does

This tool starts with a base-case rental scenario and then shows what the monthly cash flow looks like under each stress: lower rent, higher vacancy, higher maintenance, higher insurance, higher taxes, unexpected repairs, and different financing costs. Each scenario changes one assumption at a time so you can see exactly which risk hurts most.

Who It's For

It is for investors who want to know whether a rental survives normal operating stress, not just the base case. Agents and lenders use the same logic when they ask whether a property's cash flow has cushion.

What Each Input Means

  • Base case inputs: gross rent, vacancy, operating expenses, and mortgage payment that define the starting scenario.
  • Lower rent: the rent reduction percentage you want to test.
  • Higher vacancy: the additional vacancy points on top of the base rate.
  • Higher maintenance, insurance, taxes: monthly cost increases.
  • Unexpected repairs: a monthly equivalent, for example a $5,000 repair spread over a year is about $417 per month.
  • Different financing costs: the monthly change to the mortgage payment, such as a rate increase or a larger loan.

How the Calculation Works

The base cash flow is effective gross income (rent minus vacancy) minus operating expenses minus the mortgage. Each scenario adjusts one input and recomputes. The delta column shows the change from the base case.

What the Output Means

A scenario that stays positive has cushion against that risk. A scenario that turns negative shows which risk would break the deal. The tool does not combine scenarios, so a property that survives each one individually may still fail if several hit at once, which is exactly why the cushion should exceed any single scenario.

Common Questions

  • Should I test multiple risks at once? Yes, real vacancies come with repairs and cost increases. Test combinations by adjusting the base case and re-running the scenarios.
  • What is a reasonable repair allowance? It depends on the property's age, condition, and history. Use your own experience and local data; the tool does not guess.
  • Does this include income taxes? No. The cash flow is before income taxes, which vary by investor and entity.

Limitations

The scenarios are single-variable and the inputs are yours. The tool does not model taxes, appreciation, or the probability of each scenario, and it does not tell you which risks are likely. Use it with the Rental Property Calculator for a fuller picture.

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