Rental Property Calculator
Analyze rental property investment profitability including cash flow, ROI, and gross rent multiplier.
Input Parameters
Results
Evaluating Rental Property
A Gross Rent Multiplier (GRM) under 10 is generally considered good. Positive monthly cash flow means the property pays for itself. Target at least 1% of purchase price as monthly rent (1% Rule).
What is the Rental Property Calculator?
The Rental Property Calculator evaluates the financial viability of real estate investments. It calculates Cash Flow, Cap Rate, and Return on Investment (ROI) to help investors determine if a property will generate passive income or lose money.
How It Works (Formula)
A property's Net Operating Income (NOI) is calculated by taking the gross rental income and subtracting all operating expenses (taxes, insurance, maintenance, vacancy rates). The Capitalization Rate (Cap Rate) is then derived by dividing the NOI by the property's purchase price.
$$ \text{Cap Rate} = \frac{\text{Net Operating Income (NOI)}}{\text{Current Market Value}} \times 100 $$
The fundamental equation for valuing income-producing real estate.
How to Use It
Input the purchase price, down payment, and mortgage details. Next, enter the expected monthly rent and estimated expenses (repairs, HOA fees, property management). The tool will output your projected monthly cash flow and annual ROI.