Calculate cap rate, cash-on-cash return, and annual cash flow for rental property investments.
Cap rate and cash-on-cash return are simplified estimates. Actual returns depend on market conditions, tax situation, and property-specific factors. This is not investment advice.
Rental returns flow through a fixed pipeline. Start with gross rent, subtract vacancy to get effective income, subtract operating expenses (property tax, insurance, management, maintenance) to get Net Operating Income — the number used to price a property: cap rate = NOI ÷ purchase price. Paying the mortgage with NOI leaves annual cash flow, and dividing that by your cash down payment gives cash-on-cash return, the return on the money you actually risked. As a quick sanity check, the 1% rule says monthly rent should be about 1% of purchase price. In 2026, single-family cap rates typically run 4–8% depending on market, and many financed deals in pricey metros fail the 1% rule and go cash-flow negative.
Sample deal: $350,000 property, 20% down, $2,200/mo rent, 6.5% / 30-yr mortgage. Expenses stack before debt service; cap rate ignores financing while cash-on-cash includes it.
Dana buys a $350,000 house with $70,000 down (20%), rents it for $2,200/month, and holds a 30-year mortgage at 6.5%. She budgets 5% vacancy, 8% management, 1.5% maintenance, plus $4,200 tax and $1,500 insurance.
Quick start: provide your numbers and the math happens on the spot — calculate rental property ROI: cap rate, cash-on-cash return, NOI, annual cash flow. Everything runs locally; nothing is uploaded.
FreeToolHub Rental ROI Calculator is a free browser-based tool — calculate rental property ROI: cap rate, cash-on-cash return, NOI, annual cash flow. No signup, no upload; everything runs locally in your browser.
Is this rental worth buying? Cap rate, cash flow and ROI in seconds. Free, no signup.
The Rental ROI Calculator stress-tests a rental purchase from financing through monthly cash flow using nine sliders and a loan-term selector. You set purchase price, down payment, interest rate, a 15-, 20-, or 30-year term, monthly rent, vacancy rate, annual property tax and insurance, a management fee percentage, and a maintenance reserve. The engine computes a standard amortizing mortgage payment, walks rent through vacancy loss to effective gross income, deducts operating expenses to reach Net Operating Income, then subtracts debt service for annual and monthly cash flow. Two ratios anchor the verdict: cap rate, which measures the property itself without financing, and cash-on-cash return, which measures performance on the down payment you actually invested.
First-time landlords comparing listings before making an offer use it to check whether the asking price supports positive cash flow at current interest rates. Buyers weighing financing structures flip between 15- and 30-year terms or larger and smaller down payments to watch cash-on-cash return move. Remote investors who will hand the keys to a property manager set management near 8% and vacancy at a realistic 5% or higher instead of assuming perfect occupancy. Owners re-underwriting a property as taxes and insurance climb re-run the numbers in seconds. Because appreciation and depreciation are deliberately kept out of the cash-flow math, it suits anyone who wants the honest, unlevered-versus-levered view of a deal rather than a rosy total-return story.
(1) Drag the sliders to your deal; the loaded sample models a $350,000 purchase with $70,000 down at 6.5% over 30 years, $2,200 monthly rent, 5% vacancy, $4,200 of property tax, $1,500 of insurance, 8% management, and a 1.5% maintenance reserve. (2) The engine follows the standard income-statement path: annual rent minus vacancy gives effective gross income; the management fee is charged on that effective figure while maintenance is a percentage of purchase price; the remainder after tax and insurance is NOI; a fixed amortization formula produces the monthly mortgage payment. (3) Cap rate divides NOI by purchase price, cash-on-cash divides annual cash flow by down payment, and the waterfall panel lists every line from gross rent down to NOI minus annual mortgage.
They answer different questions. Cap rate divides Net Operating Income by purchase price, ignoring financing entirely, so it measures the asset and lets you compare a $200,000 duplex with a $600,000 fourplex on equal footing. Cash-on-cash divides annual cash flow by the cash you actually put in, after mortgage payments, so it measures your leveraged return and swings with every rate and down-payment change. The sample deal shows the divergence: roughly a 3.5% cap rate coexists with a negative $9,100 annual cash flow once a 6.5% mortgage is layered on. Brokers quote cap rate because it flatters the property; your bank account feels cash-on-cash. Use cap rate to compare deals, cash-on-cash to decide how much to borrow.
Healthy single-family and small-multifamily deals commonly show a cap rate of 5-10% and cash-on-cash returns of 8-12% after financing. Premium-appreciation markets (coastal metros) often run cap rates of 3-5% because the return leans on price growth, while Midwest cash-flow markets can exceed 10% with flat appreciation. This calculator gives you the return on your invested cash — compare it honestly against a boring index fund before committing to a part-time property management job.
The big four: vacancy (budget 5-8% of rent for the months between tenants), maintenance (1-2% of property value yearly, more on older homes), capital expenditures (roof, HVAC, water heater — lumpy $5,000-$15,000 hits that arrive every decade or so), and property management (8-12% of collected rent if you hire it out). Deals that look great on 'mortgage vs rent' routinely turn mediocre once these four are priced in — the calculator's expense fields exist so you price them in from day one.
Cap rate = net operating income ÷ property price — it measures the building regardless of financing. Cash-on-cash = annual pre-tax cash flow ÷ cash you invested — it measures your actual dollars' performance after the loan. Total ROI layers appreciation and principal paydown on top. Leverage turns a 6% cap-rate building into a 12% cash-on-cash deal (or a negative one); comparing a leveraged deal to an unleveraged alternative on the wrong metric is the classic new-investor mistake.
No — it deliberately prices the deal on operating performance alone: rent, operating expenses, financing, and your invested cash. Depreciation shelters, 1031 exchanges, and market appreciation are real returns but they are property- and taxpayer-specific, and they reward holding periods this tool does not model. Treat the output as the floor: if the unlevered math already works, tax benefits and appreciation are upside; if it only works with 4% annual appreciation, you are speculating, not investing.
It calculates cap rate (net operating income / property value), monthly cash flow (rent minus mortgage, taxes, insurance, maintenance, and vacancy), cash-on-cash return, and 5-year equity buildup. A cap rate above 8% generally signals a strong investment; below 4% suggests thin margins.
Defaults follow industry standards: 8% vacancy rate, 10% of rent for maintenance, 5% for property management, and 1.25% of home value annually for property tax. You can override any figure. These conservative estimates prevent the common mistake of underestimating costs by 20-30%.
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