Real Estate Calculator
Size up a rental property end to end — financing, rent, vacancy, management, operating costs, appreciation, and the eventual sale — and get the numbers investors argue about: cash flow, cap rate, cash-on-cash, IRR, and total profit at sale.
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Compare optionsHow the projection works
Year one: income minus vacancy gives effective gross income; subtracting management and operating costs yields NOI, and subtracting the mortgage yields cash flow. Each later year, rent, expenses, and value grow at your chosen rates while the loan amortizes; in the final year the model sells, pays selling costs and the balance, and folds the proceeds into the cash-flow stream behind IRR and total profit.
How it’s calculated
NOI = effective gross income − management − operating expenses, where EGI = (rent + other income) × 12 × (1 − vacancy%). Cap rate = NOI ÷ price. Cash-on-cash = (NOI − 12 × P&I) ÷ cash invested (down + closing + repairs). Sale proceeds = value × (1 + appreciation)N × (1 − cost to sell) − loan balance. IRR is solved by bisection on the yearly cash-flow series; total profit = sum of all cash flows.
Pre-tax screening estimates — not investment advice. Local taxes, rent control, capex surprises, and financing terms can change the answer materially.
Year-by-year projection
Annual cash flow (before sale), projected property value, and loan balance for each year you hold.
Worked example
A $300,000 rental with 20% down ($60,000), $6,000 closing, and $5,000 repairs takes $71,000 cash. At $2,600 rent, 5% vacancy, 8% management, year-one NOI is $19,768.80 — a 6.59% cap rate. After the $1,516.96 mortgage, cash flow is about $130 a month (2.20% cash-on-cash). Hold 20 years at 3% growth: it sells for ~$541,833, netting $364,890 after 8% selling costs and the $133,597 payoff — total profit ~$461,014, a 12.94% IRR.
Common mistakes
- Modeling 0% vacancy and $0 maintenance — the lines that most reliably eat paper profits.
- Confusing cap rate with your return: cap rate ignores the mortgage.
- Counting on appreciation to rescue negative cash flow — a bet, not a plan.
- Forgetting selling costs (often 6–9%) and taxes — results here are pre-tax.
Where it is used
- Screening a rental listing before writing an offer.
- Comparing properties on cap rate, cash-on-cash, and IRR.
- Testing how vacancy, rate, or growth assumptions move the deal.
Frequently asked questions
What is a good cap rate?
A commonly used rule of thumb puts stabilized rentals around 5–7%. Below ~4% you are paying a premium; well above 8% usually signals higher risk or numbers that deserve a second look. There is no official cap-rate statistic — compare against recent sales in the same submarket.
What is the difference between cap rate and cash-on-cash return?
Cap rate = NOI ÷ price and ignores the mortgage, so it measures the property. Cash-on-cash = cash flow after debt service ÷ cash invested, so it measures your leveraged deal — a 6.6% cap can shrink to ~2% cash-on-cash after the loan payment.
How is IRR different from total profit?
Total profit adds every dollar received minus what you put in, ignoring timing. IRR is the annualized rate that discounts the whole cash-flow series — purchase, yearly cash flows, sale — to zero, so it rewards money that arrives sooner.
What vacancy and maintenance rates should I assume?
Many investors model 5–8% vacancy and roughly 1% of the property value per year in maintenance and reserves; management typically runs 8–10% of collected rent. Using 0% for any of these is the most common way rental projections go wrong.