Rental Cashflow Calculator

How do you assess the profitability and performance of your rental investment?

Whether you’re jumping into property investment for the first time or you’re a well-versed property mogul, understanding your rental properties’ cash flow is critical for long-term portfolio health.

Below is our rental cash flow calculator. It’s designed to help you evaluate the potential financial success of your rental properties in just a few clicks by quickly determining your rental cash flow. 

Curious about the numbers? Check out our How It Works section for additional insights into the functionality and significance of each input. This section can help you navigate the ins and outs of rental property cash flow analysis.

How the Rental Cashflow Calculator Works

To get started, enter the relevant data, including the property purchase cost, loan details, anticipated rental income, and ongoing expenses. Once entered, the calculator automatically provides important figures such as your monthly cash flow, cap rate, and cash-on-cash return – essential indicators of your property’s potential performance.

It’s important to remember that calculator results are not definitive indicators of success or failure. Investment involves varying degrees of risk; what might be an acceptable risk for one investor could be unacceptable for another.

What do the inputs and outputs mean?

Below are the essential definitions for the inputs and outputs used in our Rental Cash Flow Calculator.

Inputs

Purchase Price

This is the amount you expect to pay for acquiring the property. It’s the price before negotiations and doesn’t include any additional fees or mortgage costs.

Down Payment

The initial upfront payment you make on the purchase price of the property. Typically, this ranges from 10%-25% of the purchase price.

Closing Costs

During the real estate transaction, you pay expenses and fees in addition to the purchase price of your property. These costs often range from 2-5% of the property’s purchase price.

Loan Amount

This is the amount of money you borrow to finance the property’s purchase price, which is typically the difference between the purchase price and the down payment.

Interest Rate

Your interest rate is the annual percentage rate the lender charges on your loan amount.

Loan Term

The duration, usually in years, over which the loan will be repaid to the lender. Typically, fixed-rate mortgages have loan terms of 15 or 30 years.

Monthly Rent

The total income you anticipate receiving each month from renting out the property. Not sure what that will be? Check out our free Rent Estimate calculator.

Vacancy Rate

The expected percentage of time on an annual basis that your property will not be occupied or earning income. Here’s a quick breakdown of the equation.
\[
\text{Vacancy Rate} = \left( \frac{\text{Number of Vacant Units}}{\text{Total Number of Units}} \right) \times 100
\]

Property Taxes

The taxes levied on your property each year by local government authorities. Here’s a general formula to follow, although your local government may have different components:
\[
\text{Property taxes} = \text{assessed property value} \times \text{local mill rate}
\]

Insurance

The annual cost of insuring your property against risks like damages and liabilities. In addition to homeowners insurance, you may consider having landlord insurance.

HOA Fees

Fees the homeowner association requires if the property is part of such a community. They’re paid monthly or annually.

Management Fees

These are the costs associated with using a property management service, and are typically a percentage of the monthly rental income, or could be a fixed fee.

Maintenance and Repairs

Estimated costs of yearly upkeep and repairs necessary to maintain the property in a rentable state.

Utilities

The landlord might be responsible for utility expenses, like water or electricity. Add those estimated costs in this field.

Outputs

Monthly Mortgage Payment

This is your regular payment toward your loan. It includes both the principal and the interest.

Monthly Cash Flow

The net revenue remaining each month after all costs (including mortgage) are paid. This output indicates the property’s profitability.

Cap Rate

A performance measuring tool that indicates the yield of the property, assuming it was bought outright, by dividing the Net Operating Income (NOI) by the current market value or purchase price.

Cash on Cash Return

A metric showing the percentage return on the actual cash invested, calculated by dividing the annual pre-tax cash flow by the total cash invested.