ROI Property Tools
AD SLOT (728x90 Leaderboard)

Rental Property Cash Flow Estimator

Estimate your true monthly cash flow on a long-term rental before you buy. Adjust the numbers on the left and your dashboard updates instantly.

Purchase & Financing

$
%
%
years

Monthly Income & Expenses

$
$

Parking, laundry, storage, etc.

$
$
$
%
%
%

Monthly Cash Flow Breakdown

Your Cash Flow Snapshot

Cash Flow Status Cash Flow Positive
Total Gross Monthly Income $0
Total Monthly Expenses $0
Net Monthly Cash Flow $0

Mortgage (P&I)

$0

per month

Cap Rate

0%

annualized, unlevered

Expense Breakdown

Mortgage (P&I)$0
Property taxes$0
Insurance$0
HOA fees$0
Vacancy reserve$0
CapEx / maintenance reserve$0
Property management fee$0
AD SLOT (300x250 Rectangle)

Understanding Your Cash Flow Numbers

A practical guide to how this calculator works, what cap rate actually tells you, and where landlords typically underbudget.

Long-term rental math is more forgiving than a flip or a short-term rental, but it still hides a lot in the details. Two properties with the same rent and the same purchase price can produce very different cash flow once you factor in vacancy, capital expenditure reserves, and property management, three costs that don't show up on a listing sheet but show up every year on your P&L.

This calculator builds a full monthly income statement for a rental purchase: financing costs, fixed operating expenses, and the variable reserves experienced landlords budget for but first-time buyers often skip. It's built for anyone underwriting a buy-and-hold rental before making an offer.

How the Calculation Works

The calculator separates your mortgage payment (financing), your fixed costs (taxes, insurance, HOA), and your variable reserves (vacancy, capex, management, all calculated as a percentage of gross rent), then nets everything against total income.

Total Gross Monthly Income = Gross Rent + Other Income

Mortgage Payment = standard amortized P&I on (Purchase Price × (1 − Down Payment%)) at your rate and term

Variable Reserves = Gross Rent × (Vacancy% + CapEx% + Management%)

Total Monthly Expenses = Mortgage + Taxes + Insurance + HOA + Variable Reserves

Net Monthly Cash Flow = Total Gross Income − Total Monthly Expenses

Cap Rate = (Annual Net Operating Income ÷ Purchase Price) × 100

Cap rate is calculated using Net Operating Income (income minus operating expenses, excluding the mortgage payment), which is the standard industry definition. This makes cap rate a measure of the property's own performance, independent of how you finance it.

Worked Example

A $250,000 rental with $2,100 monthly gross rent, 20% down, a 6.5% rate on a 30-year loan, and typical reserve percentages (5% vacancy, 5% capex, 8% management):

  • Loan amount: $250,000 × 80% = $200,000
  • Variable reserves: $2,100 × (5% + 5% + 8%) = $2,100 × 18% = $378/month
  • After mortgage P&I (roughly $1,264/month at these terms), taxes, insurance, and reserves, net cash flow typically lands in the $150 to $350/month range for this kind of deal

Notice how much of the expense side comes from percentages of rent rather than fixed dollar costs. That's intentional: vacancy, turnover-related repairs, and management fees all scale with how much rent you're actually collecting, not with the purchase price.

Strengths of This Model

  • ✓Builds in vacancy, capex, and management reserves by default, the three costs most new landlords forget to budget
  • ✓Cap rate uses NOI (excludes financing), so you can compare deals on an apples-to-apples basis regardless of your down payment
  • ✓Full amortization schedule for the mortgage, not a rough estimate

Limitations to Know

  • ✕Doesn't model rent growth, appreciation, or tax benefits like depreciation, all of which affect long-term returns
  • ✕Assumes flat monthly figures; doesn't account for a lease-up period on a vacant purchase
  • ✕Closing costs and upfront repairs aren't included in the cash flow math

Who This Is For, and When Not to Use It

Use this calculator when you're evaluating a rent-ready property, comparing financing scenarios (different down payments or rates) on the same property, or checking whether a rent increase or expense change still leaves you cash-flow positive.

Don't rely on it alone for a value-add property that needs significant rehab before it can be rented; use the BRRRR calculator for that scenario instead, since it accounts for the rehab-then-refinance sequence this tool doesn't model.

Common Mistakes to Avoid

  • 1Setting vacancy or capex reserves to 0% just to make a marginal deal look better on paper
  • 2Comparing cap rates across markets without adjusting for local property tax rates, which vary widely and directly affect the number
  • 3Using asking rent instead of a realistic achievable rent based on comparable active listings, not other landlords' optimistic estimates

Frequently Asked Questions

What's a good cap rate for a rental property?

It depends heavily on the market. In lower-appreciation markets, investors often target 7-10% or higher; in high-appreciation coastal markets, 4-6% is common because buyers are pricing in future value growth, not just current income. Compare cap rates within the same market rather than against a single national benchmark.

Why does cap rate exclude the mortgage payment?

Cap rate is meant to measure how well the property itself performs, independent of how any particular buyer chooses to finance it. Two buyers, one paying cash and one financing 80%, should see the same cap rate on the same property, since the mortgage is a financing decision, not a property characteristic.

What vacancy rate should I actually use?

5% is a common default (roughly 18 days of vacancy per year), but the right number depends on your local rental market, tenant turnover history, and unit type. Ask a local property manager what typical days-on-market and turnover rates look like for comparable units before finalizing your assumption.

How is this different from the BRRRR calculator?

This tool assumes the property is already rent-ready at purchase. If the property needs significant rehab before it can be rented, and you're planning to refinance based on the after-repair value, use the BRRRR Calculator instead, since it models the rehab-then-refinance sequence this tool doesn't.

Related Calculators

BRRRR Calculator

For properties that need rehab before they can be rented.

Airbnb ROI Predictor

Compare this property's performance as a short-term rental.

Fix-and-Flip Calculator

Compare holding as a rental against a resale exit.