Rental Property ROI & Cap Rate Calculator
Analyze a rental deal the way investors and lenders do. Enter the purchase, financing, income, and operating costs to get cash flow, cap rate, cash-on-cash return, and the debt-service coverage ratio lenders check.
Example: with Purchase price $250,000 · Down payment 25% · Interest rate 7% · Loan term 30 yrs → Monthly cash flow: $141.
- Cap rate6.7%
- Cash-on-cash return2.5%
- DSCR (lender ratio)1.11
Computed by the calculator below using its default values. Change any input to see your own numbers.
Monthly rent split
How you compare
The full picture, including the lender's view
This now accounts for closing costs, rehab, management, and maintenance/capex reserves — the expenses that quietly turn a 'positive' deal negative. Cap rate compares income to price. Cash-on-cash measures return on the actual cash you invest. DSCR — net operating income divided by debt payments — is what lenders use to approve investment loans; most want 1.20 or higher. It still excludes appreciation, depreciation, and taxes, so true total return may be higher.
How it’s calculated
NOI = effective rent − operating expenses. Cap rate = NOI ÷ price. Cash flow = NOI − annual mortgage. Cash-on-cash = annual cash flow ÷ cash invested. DSCR = NOI ÷ annual debt service.
The optional sell analysis grows the home value and rent by their yearly appreciation rates, estimates the sale price and remaining loan balance at the end of the holding period, and nets out sale costs to get proceeds. IRR solves for the annual rate that makes the net present value of the initial cash invested (negative) plus each year's cash flow, including the final year's sale proceeds, equal to zero — found here with Newton's method and a bisection fallback.
Results update as you type and are estimates, not professional advice — verify important decisions with a qualified professional.
Common mistakes
- Leaving out management, maintenance, and capex reserves.
- Forgetting closing costs and rehab in the cash invested.
Frequently asked questions
What DSCR do lenders want?
Commonly 1.20–1.25 or above, meaning income covers the mortgage with a cushion. Below 1.0 the property doesn't cover its own debt.
What should maintenance and capex be?
Many investors reserve 5–10% of rent each for maintenance and capital expenses. Older properties need more.
Does this include appreciation?
No — it focuses on income return. Appreciation and tax benefits can add to total return but are less certain.