Analyse any rental property investment. Calculate monthly cash flow, cap rate, cash-on-cash ROI, and net operating income instantly.
Input the purchase price, down payment, loan term and interest rate.
Add monthly rent, vacancy rate, property management fee, taxes, insurance, maintenance, and other monthly costs.
Review monthly cash flow, annual cash flow, cap rate, cash-on-cash ROI, and net operating income.
Cap rates vary by market and property type. A cap rate of 5-7% is generally considered acceptable for residential rental property. Below 5% may signal overpriced or low-yield property. Above 10% may indicate higher risk or undervalued property. Always compare against local market cap rates.
Cash-on-cash (CoC) return measures annual cash flow as a percentage of your total cash invested (down payment + closing costs). A CoC return of 8-12% is generally considered good for residential rental property. It differs from cap rate by including your financing costs.
The 1% rule states that a rental property is worth considering if monthly rent is at least 1% of the purchase price. A $300K property should rent for at least $3,000/month. This is a quick screening tool — always do a full analysis with actual expenses before buying.
Typical residential vacancy rates run 5-10% (meaning 0.6 to 1.2 months vacant per year). In high-demand markets with low supply, vacancy may be 2-3%. In weaker markets, 10-15%. Use 8% (roughly 1 month vacant per year) as a conservative baseline if you are unsure.
Budget 1% of property value annually for maintenance and repairs as a baseline. Older properties, those in harsh climates, or properties with pools may need 2-3% or more. Always maintain a reserve fund of at least 3-6 months of expenses for unexpected repairs.
NOI = Gross rental income - Vacancy losses - Operating expenses (tax, insurance, management, maintenance). It excludes mortgage payments. NOI is used to calculate cap rate and compare properties regardless of financing. A positive NOI means the property covers its own operating costs.
If you self-manage, you save the fee (typically 8-12% of rent) but invest your time. Always include management fees in your analysis even if you plan to self-manage — it reflects the true economic cost and protects you if you ever need to hire a manager.
GRM = Property price / Annual gross rent. A lower GRM suggests a better deal. For example, a $300K property renting for $24,000/year has a GRM of 12.5. Markets with GRMs below 15 generally favour investors; above 20 may be challenging to cash flow positive.
