Is this rental a good investment?
Enter the price, financing and expected rent, plus vacancy, taxes, insurance, HOA fees, maintenance and property management. The calculator shows:
- Net operating income (NOI) – rent collected minus operating expenses, before the mortgage.
- Cap rate – NOI divided by the purchase price, a quick way to compare properties regardless of financing.
- Cash flow – what is left after the mortgage payment each month.
- Cash-on-cash return – yearly cash flow divided by the cash you put in.
Quick rules of thumb
- 1% rule – monthly rent of about 1% of the price suggests the property may cash-flow. Few properties in expensive areas meet it.
- 50% rule – operating expenses often run near half of the rent over time.
Always check local rents, property taxes, insurance quotes and landlord laws before buying.
Frequently asked questions
What is a good cap rate?
It depends on the market and risk. Many investors look for 5% to 10%; higher cap rates often come with more risk or older properties.
Can I deduct rental property expenses?
Yes. Mortgage interest, property tax, insurance, repairs, management fees and depreciation are generally deductible against rental income. Residential rentals are depreciated over 27.5 years.
How much should I budget for repairs?
Many landlords set aside 5% to 10% of rent for maintenance plus a separate reserve for big items such as a roof or HVAC system.