Rental Property ROI Calculator
Evaluate a real estate investment by calculating Cash-on-Cash Return and Cap Rate.
General Details
Net Operating Income (NOI)
$24,000.00
8.00%
Cap Rate
40.00%
Cash-on-Cash Return
Financial Summary
Based on your inputs, your estimated net operating income (noi) is $24,000.00.
What is the Rental Property ROI Calculator?
The Rental Property ROI Calculator helps real estate investors evaluate potential rental properties by calculating critical metrics like Cash-on-Cash Return, Cap Rate, and Net Operating Income (NOI).
It analyzes values such as home price or rent, down payment, rate, tax and insurance and returns insight through outputs like monthly housing cost, affordability range, equity projection, ownership gap.
This structure helps you compare alternatives, understand trade-offs, and identify whether your current strategy is aligned with your goals.
How to Use the Rental Property ROI Calculator
Enter realistic values for home price or rent, down payment, rate, tax and insurance based on your current situation.
Review default assumptions and adjust them to match your market, risk profile, and timeline.
Run the calculation and review core outputs such as monthly housing cost, affordability range, equity projection, ownership gap.
Test at least three scenarios (conservative, expected, and optimistic) to understand range of outcomes.
Example Scenario
Example: Evaluating a $300k rental
You buy a $300k house with 20% down ($60k). It rents for $2,500/month, and expenses (including mortgage) are $2,000/month.
- Enter $300k price and 20% down payment.
- Enter $2,500 monthly rent and $2,000 expenses.
- Review the resulting Cash-on-Cash return.
Your net cash flow is $500/month ($6,000/year). Divided by your $60k investment, your Cash-on-Cash return is exactly 10%.
Why Use the Rental Property ROI Calculator?
- Convert complex financial formulas into clear numbers you can act on quickly.
- Measure whether your current plan is on track against your real-world goals.
- See how changing one variable affects outcomes before committing money.
- Stress-test downside scenarios so surprises are less likely later.
- Identify hidden cost drivers that reduce long-term financial efficiency.
- Prioritize next actions based on measurable impact instead of guesswork.
- Create a repeatable decision process you can use month after month.
- Improve clarity when discussing options with family, lenders, or advisors.
- Track progress over time and correct course early when assumptions change.
- Use the outputs to balance affordability, stability, and long-term housing goals.
Frequently Asked Questions
A 'good' Cap Rate typically ranges from 4% to 10% depending on the market. Higher cap rates usually indicate higher risk or lower-tier neighborhoods, while lower cap rates are found in highly desirable, low-risk areas.
Cap Rate measures the yield of a property assuming you bought it in all cash. Cash-on-Cash Return measures the return on your actual cash invested (down payment), factoring in your mortgage payments.
Include property taxes, insurance, HOA fees, property management (usually 8-10% of rent), maintenance reserves (usually 5-10% of rent), and vacancy reserves.
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