Property Type
Purchase & Financing
$
%
= $75,000
%
$
$
Rental Income
$
Annual Expenses
%
% of gross rent lost to vacancy
%
% of effective gross rent
%/yr of value
$
Per year
%/yr of value
%/yr of value
$
0 if none
Target Solver — Find Max Offer Price or Required Rent
%
Max Offer Price
Enter inputs to solve
Annual Cash Flow
$0
Monthly: $0/mo | Debt Service: $0/mo
Cap Rate
0.00%
Cash-on-Cash
0.00%
DSCR
0.00x
Key Metrics
NOI / Year
$0
Cap Rate
0.00%
Cash-on-Cash
0.00%
DSCR
0.00x
Monthly CF
$0
Break-Even Occ.
0%
NOI = Eff. Rent − OpEx Cap Rate = NOI / Value DSCR = NOI / Debt Svc CoC = Annual CF / Cash In
Income vs Expenses
Income
Gross Rent / yr$0
Vacancy Loss−$0
Effective Rent$0
Expenses
Management$0
Property Tax$0
Insurance$0
Maintenance$0
CapEx$0
Total OpEx$0
Expense Breakdown
Cap Rate vs Benchmarks
Your Cap Rate
0.0%
Market Avg (6%)
6.0%
S&P 500 (10%)
10.0%
Negative cash flow. This property costs more to own than it generates. Consider negotiating a lower price or increasing rent.
DSCR below 1.0x — NOI cannot cover debt service. Most lenders will decline financing at this level.
📅 DSCR 1.0–1.25x is below the standard 1.25× lender minimum. Refinancing may be difficult.
Debt service exceeds 90% of NOI — very thin coverage. Consider a larger down payment to improve DSCR.
📅 Cap rate below 4%. Low-yield deal — ensure appreciation potential justifies the investment.
💰 Cash-on-cash return below 5%. Your equity isn't working hard. Consider a lower price or higher rent.
📉 Negative leverage: mortgage rate exceeds cap rate. Financing compresses returns — an all-cash purchase would yield more.
GRM above 15. You're paying a high multiple of gross rent. The 1% rule says monthly rent should be ≥ 1% of purchase price.
PMI is active (down payment < 20%). It auto-cancels when equity reaches 20%.
📋 Operating expense ratio exceeds 50% of gross rent (50% rule). Verify your expense estimates carefully.
🏠 Vacancy rate above 8%. High vacancy may indicate a softer rental market — verify local occupancy rates.
Low break-even occupancy — very resilient deal, stays cash-positive even at high vacancy.
Expense ratio is well under 50% — this deal passes the 50% rule with a healthy margin.
Strong deal! Cap rate ≥ 6% and positive cash flow — this property meets typical investor thresholds.
Excellent cash-on-cash return of 10%+! This deal delivers strong cash returns on invested capital.
BRRRR Analysis — Buy, Rehab, Rent, Refinance, Repeat

Enter the After-Repair Value (ARV) and refi terms to calculate capital recovery after refinancing.

$
%
%
Refi Loan Amount
Capital Recovered
Cash Left In
New Ann. CF
Effective CoC
Enter ARV above to analyze BRRRR potential.
Bear / Base / Bull Scenarios

Bear: vacancy +5%, rent −5%  |  Base: your inputs  |  Bull: vacancy −3%, rent +10%

Bear Case
Monthly Rent$0
NOI$0
Cash Flow / yr$0
Cap Rate0.00%
Cash-on-Cash0.00%
DSCR0.00x
Break-Even Occ.0%
Base Case
Monthly Rent$0
NOI$0
Cash Flow / yr$0
Cap Rate0.00%
Cash-on-Cash0.00%
DSCR0.00x
Break-Even Occ.0%
Bull Case
Monthly Rent$0
NOI$0
Cash Flow / yr$0
Cap Rate0.00%
Cash-on-Cash0.00%
DSCR0.00x
Break-Even Occ.0%
NOI Waterfall — From Gross Rent to Cash Flow
Sensitivity Matrix — Cash-on-Cash Return (%)

Rows = Monthly Rent  ·  Columns = Purchase Price

Benchmark Comparison
Metric This Deal 1% Rule Target 2% Rule Target
Monthly Rent
Rent-to-Price Ratio 1.00% 2.00%
Est. Monthly Cash Flow
Meets Rule? Benchmark Stretch Goal
50% Rule (OpEx ratio) ≤ 50% to pass
GRM ≤ 10x ideal

Note: 1%/2% rule cash flow estimates use your current expense inputs.

Down Payment Comparison

How different down payment levels affect monthly CF and CoC return

Scenario Down $ Loan $ P&I / mo PMI / mo Monthly CF CoC %
Projection Assumptions
%
%
%
Total Cash Flow 10-yr
Equity Built
Property Value
Total Wealth Created
Avg Annual CoC
PMI Drops
N/A
Wealth Build-Up Over 10 Years
Hold Property
Equity + cumulative cash flow
Sell Property
Sale proceeds after 6% costs + CF
S&P 500 Alt.
Cash invested at 10% annual return
Year-by-Year Breakdown
Year Monthly Rent NOI Cash Flow Property Value Loan Balance Equity Cumul. CF CoC % DSCR PMI

Frequently Asked Questions

What is a good cap rate for a rental property?

A cap rate of 6–8% is generally considered good for residential rentals. Below 4% is low yield; above 8% often signals higher risk or a value-add opportunity. Cap rates vary significantly by market — gateway cities like NYC run 3–4% while secondary markets often yield 7–9%.

What is DSCR and why does it matter?

DSCR (Debt Service Coverage Ratio) = NOI / Annual Debt Service. It measures how many times over the property's income covers its mortgage payments. Most lenders require 1.25×. Below 1.0× means the property literally can't cover its own debt from rental income.

What is break-even occupancy?

Break-even occupancy is the minimum occupancy rate needed to cover all expenses including debt service. A 70% break-even means the property stays cash-flow positive even if 30% of the time it sits vacant. Below 70% is very resilient; above 90% leaves little margin for error.

What is the 1% rule in real estate?

The 1% rule says monthly rent should be at least 1% of the purchase price as a quick screening filter. A $300,000 property should rent for $3,000/mo. It's a heuristic — not a substitute for full analysis — and harder to meet in expensive markets.

What is the 50% rule?

The 50% rule estimates operating expenses (excluding mortgage) at about 50% of gross rent. If taxes + insurance + maintenance + CapEx + management + vacancy losses exceed 50% of gross rent, cash flow will be thin. This calculator shows your actual expense ratio for a more precise analysis.

What is cash-on-cash return?

Cash-on-cash return = Annual Cash Flow / Total Cash Invested × 100%. It measures the return on your actual out-of-pocket investment (down payment + closing costs + initial repairs). Unlike cap rate, it accounts for financing. A 5–8% CoC is fair; 10%+ is excellent.

What is NOI in rental property analysis?

Net Operating Income = Effective Gross Rent − All Operating Expenses, before mortgage payments. NOI is the key metric for property valuation (cap rate = NOI / value) and loan underwriting (DSCR = NOI / debt service). A higher NOI means a more valuable property regardless of financing.

What is the BRRRR strategy?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market value, renovate it to increase the After-Repair Value (ARV), rent it out, then refinance based on the new appraised value to pull out most or all of your original capital — which you then deploy into the next deal.

What is GRM (Gross Rent Multiplier)?

GRM = Purchase Price / Annual Gross Rent. It's a quick valuation metric. A GRM under 10 is excellent; 10–14 is good; above 15 means you're paying a high multiple of gross rent. Unlike cap rate, GRM ignores expenses, so use it alongside other metrics.

What is negative leverage in real estate?

Negative leverage occurs when your mortgage interest rate exceeds the cap rate. When this happens, borrowing money actually reduces your overall return — you'd earn more by purchasing with all cash. The calculator flags this condition in the alert section.

Does PMI apply to investment properties?

Yes — if you put less than 20% down on an investment property, lenders typically require PMI at approximately 0.5% of the loan balance per year. This calculator automatically adds PMI when down payment is below 20% and shows when it will drop off as equity builds.

How do I find the max offer price for a target return?

Use the Target Solver panel below the inputs. Enter your target cash-on-cash return percentage, select "Max Offer Price" mode, and the calculator uses binary search to solve the exact purchase price that achieves your target CoC. You can also solve for the required monthly rent to hit a target return.

How does rent growth affect long-term returns?

Rent growth is one of the most powerful long-term variables. At 3% annual growth, rent doubles in 24 years while your mortgage payment stays fixed — dramatically improving cash flow over time. The Wealth Projector shows this compounding effect year by year.

What is a good cash-on-cash return?

5–8% CoC is fair for stable markets. 8–10% is good. 10%+ is excellent and often found in higher-risk or value-add deals. Compare against alternatives: the S&P 500 averages ~10%/yr with zero management burden, so rental investing must offer sufficient premium for the effort.

Should I hold or sell my rental property?

The Wealth Projector's "Hold vs Sell" tab computes three outcomes: (1) Hold — total equity + cumulative cash flow at end of hold period; (2) Sell — net proceeds after 6% selling costs plus all cash flow earned; (3) S&P 500 — if you had invested the same cash at 10%/yr. The winner is highlighted with a star.

How to Use This Calculator

1

Enter Property Details

Input the purchase price, down payment, loan terms, and expected rental income. Select your property type for quick presets.

2

Add Operating Expenses

Include property taxes, insurance, maintenance, CapEx reserve, vacancy rate, management fees, and HOA if applicable.

3

Review Returns & Metrics

See NOI, cap rate, cash-on-cash, DSCR, break-even occupancy, and long-term wealth projections with Hold vs Sell analysis.

Formula & Methodology

Net Operating Income

NOI = Gross Rent − Vacancy − Operating Expenses

Annual income after expenses but before mortgage payments. The key metric for property valuation and loan underwriting.

Cash-on-Cash Return

CoC = Annual Cash Flow / Total Cash Invested × 100%

Measures the return on your actual out-of-pocket investment, including down payment, closing costs, and initial repairs.

Cap Rate

Cap Rate = NOI / Purchase Price × 100%

The property's return if purchased with all cash. Useful for comparing properties regardless of financing structure.

DSCR

DSCR = NOI / Annual Debt Service

Debt Service Coverage Ratio. Lenders require ≥ 1.25×. Below 1.0× means the property cannot service its own debt from income.

Key Terms

NOI
Net Operating Income — rental income minus operating expenses, excluding mortgage payments.
Cash Flow
Monthly or annual income remaining after all expenses including the mortgage payment.
Cap Rate
Capitalization Rate — NOI divided by property value. Higher cap rates indicate higher returns but often higher risk.
DSCR
Debt Service Coverage Ratio — NOI divided by annual mortgage payment. Below 1.25× makes refinancing difficult.
Break-Even Occupancy
The minimum occupancy needed to cover all expenses including debt. Lower is better — means the deal is more resilient to vacancy.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle capital by refinancing after renovating to increase property value.
Vacancy Rate
The percentage of time the property sits empty. Budget 5–10% for residential properties.
1% Rule
A quick screening rule: monthly rent should be at least 1% of the purchase price for positive cash flow.

Real-World Examples

Example 1

Single Family Rental

Purchase: $250,000, Down: 25% ($62,500), Rent: $1,800/mo, Expenses: $600/mo, Mortgage: $950/mo

Result: Monthly cash flow = $250, CoC = 4.8%, Cap rate = 5.8%, DSCR = 1.32×. Positive cash flow and healthy DSCR from day one.

Example 2

Duplex BRRRR Deal

Purchase: $280,000, Rehab: $40,000, ARV: $380,000, Down: 20%, Rent: $3,200/mo (both units)

Result: Refi at 75% of ARV = $285,000 — recovers all original capital. BRRRR complete with near-infinite effective CoC on recycled equity.

Evaluating Rental Property Investments

Cash Flow Is King

Positive monthly cash flow after all expenses is the foundation of successful rental investing. Appreciation is a bonus, not a strategy. A property that loses money monthly is a speculation, not an investment.

The True Cost of Being a Landlord

Budget 5–10% for vacancy, 5–10% for repairs and maintenance, and 8–10% for property management even if self-managing initially. Underestimating expenses is the most common mistake new investors make.

Leverage Amplifies Returns — and Risks

With 25% down on a property that appreciates 3% annually, your equity grows at 12% due to leverage. But leverage cuts both ways — in a downturn, your losses are also magnified. Always maintain adequate cash reserves and verify DSCR remains above 1.25×.

Why DSCR Matters Beyond Cash Flow

Even a cash-flow positive property can have a DSCR below lender minimums if NOI is thin relative to debt service. Monitoring DSCR ensures the property qualifies for refinancing — critical for BRRRR strategies and portfolio growth.