Free Tool
Rental Property ROI Calculator
Enter the purchase price, deposit, rent, and running costs for a rental property to see monthly cash flow, cap rate, and cash-on-cash return.
| Loan amount (price − deposit) | $0 |
| Estimated monthly mortgage payment (principal & interest) | $0 |
| Annual net operating income (rent − operating costs, before mortgage) | $0 |
| Annual cash flow (after mortgage) | $0 |
| Total cash invested (deposit + closing costs) | $0 |
Assumptions: the mortgage payment is a standard fixed-rate principal & interest amortization on the loan amount, rate, and term you enter — it excludes property tax and insurance, which should already be included in your monthly operating costs above. Cap rate = annual net operating income ÷ purchase price (mortgage-independent, for comparing properties). Cash-on-cash return = annual cash flow ÷ total cash invested (mortgage-dependent, specific to how you financed this deal). This doesn't account for appreciation, depreciation, tax treatment, or one-off repairs.
How do I calculate ROI on a rental property?
Rental property returns get measured a few different ways, and each answers a slightly different question. This calculator gives you the three most commonly used: monthly cash flow, cap rate, and cash-on-cash return.
Cash flow is the simplest and most immediate: rent coming in, minus every cost of owning and financing the property going out, including the mortgage. Positive cash flow means the property pays for itself and puts money in your pocket every month; negative cash flow means you're subsidizing it out of your own income, which can still make sense if you're betting on appreciation, but it's a different bet than a cash-flowing property.
Cap rate (capitalization rate) deliberately excludes the mortgage. It's net operating income — rent minus operating costs, before financing — divided by the purchase price. Because it ignores how the deal is financed, cap rate is the standard way to compare two different properties on their own merits, independent of whether one buyer put down 10% and another paid cash.
Cash-on-cash return is the opposite: it's entirely about financing. It measures the annual cash flow (after the mortgage) against the actual cash you put into the deal — deposit plus closing costs — not the full purchase price. This is the number that tells you how hard your actual invested dollars are working, and it's why the same property can look very different to a buyer putting 10% down versus 40% down.
A few things this calculator doesn't do: it doesn't account for appreciation or the loan principal you're paying down each month (both of which add to your real return over time), it doesn't model vacancy separately from your operating cost estimate, and it doesn't touch depreciation or tax treatment, which varies by jurisdiction and can meaningfully change an investment's after-tax return. Treat the output as a first-pass screen for whether a deal is worth digging into further — not a substitute for a full underwriting model or advice from a real estate or tax professional.
Frequently asked questions
What's a good cap rate for a rental property?
It varies a lot by market — cap rates in expensive coastal cities often run 3–5%, while cap rates in cheaper secondary markets can run 8–10%+. A 'good' cap rate is relative to the area and the risk profile of the property, so compare it to similar properties in the same market rather than a single universal target.
What's the difference between cap rate and cash-on-cash return?
Cap rate ignores financing entirely — it's net operating income divided by purchase price, useful for comparing properties on their own merits. Cash-on-cash return is entirely about financing — it's annual cash flow after the mortgage, divided by the actual cash you invested, which is why the same property gives different cash-on-cash numbers depending on your down payment and loan terms.
Does this calculator include property tax and insurance?
Not separately — they should be included in the 'monthly operating costs' field along with maintenance, management fees, HOA dues, and a vacancy allowance. The mortgage payment field only calculates principal and interest.
Why might a property have positive cap rate but negative cash flow?
This happens when the mortgage payment is large relative to net operating income — often with a small down payment or a high interest rate. Cap rate says the property performs fine on its own; cash flow says it's not covering the actual financing you chose, which is exactly why both numbers matter together.
Want the full system, not just this one number?
This calculator screens one deal at a time. The Rental Property Manager Toolkit tracks rent, expenses, tenants, and maintenance across up to 8 properties, with a dashboard that shows real cash flow and net income as they actually happen — not just projected at purchase.
One-time purchase. No subscription.