Rental Property Calculator — Free Real Estate Investment Analyzer (2025)

A good cash-on-cash return typically ranges from 8-12% in most markets. Properties returning 15%+ are excellent investments. However, this varies by market—coastal areas with high appreciation potential might accept 6-8%, while Midwest markets should target 10-15%. Always compare returns to alternative investments and factor in your risk tolerance, time commitment, and local market conditions.

NOI = Effective Gross Income - Operating Expenses. First, calculate your annual rent multiplied by (1 - vacancy rate) to get effective gross income. Then subtract all operating expenses like property taxes, insurance, maintenance, property management, and HOA fees. Do NOT include mortgage payments or financing costs—NOI measures the property's profitability independent of financing.

The 1% rule states that monthly rent should equal at least 1% of the purchase price. A $200,000 property should rent for $2,000/month. This is a quick screening tool—properties meeting the 1% rule often cash flow positively. However, it doesn't account for varying expenses, property taxes, or insurance costs, so always run full calculations. In high-cost markets, the 0.7-0.8% rule might be more realistic.

Self-managing saves 8-12% of rental income but requires significant time and expertise. Consider hiring a manager if you: live far from the property, own multiple units, lack maintenance skills, or value your time more than the management fee. Professional managers handle tenant screening, rent collection, maintenance coordination, and legal compliance. For first-time investors, experienced managers can prevent costly mistakes worth far more than their fees.

Budget 5-10% of gross rent annually for maintenance, plus 5-10% for capital expenditures (CapEx). Newer properties (under 10 years) might need 5% total, while older properties (30+ years) may require 15-20%. Factors affecting maintenance costs include property age, tenant quality, climate, and your DIY capabilities. Create a reserve fund for major systems: HVAC ($5,000), roof ($10,000), appliances ($2,000), plumbing/electrical ($3,000).

The 50% rule estimates that operating expenses will consume about 50% of gross rental income over time. If you collect $2,000/month in rent, expect $1,000 in expenses (excluding mortgage). This quick calculation helps screen properties: Monthly rent × 50% - Mortgage payment = Estimated cash flow. While not precise, it's surprisingly accurate across large portfolios and serves as a good initial filter before detailed analysis.

Yes! Several strategies work with less down: FHA loans allow 3.5% down on 2-4 unit properties if you live in one unit; VA loans offer 0% down for veterans; house hacking lets you use owner-occupied financing; some conventional lenders accept 15% down on investment properties with PMI; or partner with investors who provide down payment capital. Creative financing like seller financing or subject-to deals can also reduce upfront cash needs.

Good cap rates vary significantly by location and property type. Class A properties in major markets: 4-6%; Class B in suburban areas: 6-8%; Class C in emerging neighborhoods: 8-12%. Higher cap rates indicate higher potential returns but usually come with more risk, lower appreciation, or challenging locations. Compare cap rates locally—what's good in San Francisco differs from what's good in Cleveland. Focus on properties with cap rates above your local market average.