Cash flow, cap rate, cash-on-cash return, and total ROI for long-term rentals
This comprehensive calculator helps you determine whether investing in a rental property makes financial sense. By analyzing cash flow, return on investment, and long-term profitability, you can make informed decisions about real estate investments before committing your capital.
Measures the property's return potential independent of financing. A higher cap rate (typically 5-10%) indicates better returns. Calculated as: Net Operating Income ÷ Property Price × 100.
Shows your first-year return on actual cash invested. Good rental properties typically achieve 8-12% annually. Calculated as: Annual Cash Flow ÷ Total Investment × 100.
Measures ability to cover mortgage payments. Lenders require minimum 1.2 (property generates 20% more income than debt payments). Below 1.0 means negative cash flow.
Your complete return over the holding period, including cash flow, appreciation, and equity buildup. This shows the big picture of your investment performance.
Enter property details to see investment summary
Enter property details to see amortization schedule
Enter property details to see cash flow analysis
Enter property details to compare against alternative investments
This calculator runs a long-term (traditional lease) rental the way a professional investor underwrites a deal: it builds the pro-forma month by month, nets out every expense a landlord actually pays — not just the mortgage — and then reports the four metrics that matter most: monthly cash flow, cap rate, cash-on-cash return, and total ROI including appreciation and principal paydown.
Net Operating Income (NOI):
Cap rate:
Cash-on-cash return:
Operating expenses include taxes, insurance, HOA, management (usually 8%–10% of collected rent), repairs/maintenance (5%–10% of rent), capex reserves (another 5%–10%), landscaping, pest, and any owner-paid utilities. The calculator takes each separately.
Two shortcuts investors use before pulling full numbers:
Cap rate is net operating income divided by purchase price. A "good" cap rate depends on the market: 4%–6% is typical in high-cost coastal metros, 6%–8% in most of the Midwest and South, and 8%+ in smaller cities and class-C neighborhoods. Lower cap rates often come with higher appreciation; higher cap rates come with more risk.
Cash-on-cash return is annual pre-tax cash flow divided by total cash invested (down payment + closing costs + any rehab). It tells you the cash yield on the actual money you put into the deal, which is more useful than cap rate for leveraged investments. 8%–12% is a common target for long-term rentals.
The 1% rule says a rental's gross monthly rent should be at least 1% of the purchase price (so a $200,000 property should rent for $2,000+/month). It's a quick screen, not a full analysis — in most 2025–2026 markets properties priced to the 1% rule are rare, and 0.7%–0.8% is more common. Use the full cash-flow analysis before deciding.
The 50% rule assumes operating expenses (excluding mortgage) will consume about 50% of gross rents over the long run — taxes, insurance, maintenance, vacancy, management, and capex. It's a sanity check against under-budgeting. The calculator lets you input each expense individually, but if the sum is well below 50% of rent, double-check your maintenance and vacancy assumptions.
Cash-on-cash counts only annual cash flow. Total ROI also includes principal paydown (tenants paying off your mortgage), appreciation, and tax benefits. On a well-leveraged rental, total ROI is typically 2x–4x the cash-on-cash figure because the other three components are usually the bigger slice of returns.