Investing
Rental Property ROI Calculator
A rental only makes sense if the numbers do. Enter the price, your cash in, the rent, and the monthly costs to see cash flow, cap rate (the unlevered yield), and cash-on-cash return (what your invested cash actually earns) — the three figures investors screen deals with.
Tested against worked examplesHow we verify
Taxes, insurance, maintenance, vacancy, and management — everything except the mortgage.
Principal + interest. Set to 0 for an all-cash purchase.
Cash-on-cash return: 5.22%
Cash-on-cash return
5.22%
Annual cash flow as a percent of the cash you invested.
- Monthly cash flow
- $300
- Cap rate
- 6.4%
- Net operating income (yr)
- $19,200
- Cash invested
- $69,000
Net operating income ÷ price (ignores financing).
Compare scenariosTry three values of one input
| Purchase price | |||
|---|---|---|---|
| Cash-on-cash return | 5.22% | 5.22% | 5.22% |
| Cap rate | 7.11% | 6.4%−0.71% | 5.82%−1.29% |
Every other input stays at the value you set above — currently $300,000 for purchase price. Differences are measured against the first column.
Saved scenariosSave this calculation
Saved in this browser only — no account, and nothing is sent to us. Clearing your browser data deletes them.
How this calculator works
Net operating income = (rent − operating expenses) × 12. Cap rate = NOI ÷ purchase price. Monthly cash flow = rent − operating expenses − mortgage; cash-on-cash = annual cash flow ÷ (down payment + closing costs). Operating expenses exclude the mortgage by definition.
This is a first-pass screen, not a full pro forma. It doesn't model appreciation, principal paydown (equity you build), depreciation tax benefits, or rent growth — all of which add to real returns. Verify every expense with real quotes before you buy.
What this assumes
- Rent, vacancy and expenses as entered. New landlords routinely assume 100% occupancy and no repairs, and both assumptions fail.
- Capital expenditure — roof, boiler, appliances — is excluded unless entered, and it arrives in lumps.
- Depreciation, depreciation recapture on sale and the tax treatment of losses are not modelled.
What changes this number
- Vacancy and repairs
- The two lines that separate a projected return from a realised one.
- Financing terms
- Investment property rates and down payment requirements are stricter than for a primary residence.
- Management
- Self-managing is unpaid work. Costing it at the market rate is the honest comparison against a passive investment.
A worked example
Take the $300k, $2,200 rent, positive scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Purchase price
- $300,000
- Monthly rent
- $2,200
- Monthly operating expenses
- $600
- Monthly mortgage payment
- $1,300
What it returns
- Cash-on-cash return
- 5.22%
- Monthly cash flow
- $300
- Cap rate
- 6.4%
- Net operating income (yr)
- $19,200
- Cash invested
- $69,000
Try an example
Frequently asked questions
What is a cap rate?
The capitalization rate is a property's net operating income (rent minus operating expenses, before the mortgage) divided by its price. It measures the unlevered yield — what the property earns regardless of how you finance it — so it's the standard way to compare deals. Typical rates run 4–10% depending on market and risk.
What's the difference between cap rate and cash-on-cash return?
Cap rate ignores your loan and asks what the property yields on its full price. Cash-on-cash includes the mortgage and divides your actual annual cash flow by the cash you invested (down payment plus closing costs). Leverage usually makes cash-on-cash higher than the cap rate — as long as the property cash-flows positively.
What is a good cash-on-cash return on a rental?
Many investors target 8% or more, but it depends on your market and strategy. Cash-flow investors want a high cash-on-cash today; appreciation investors accept a lower one, betting on the property's value and rent rising. Either way, negative cash flow means you're subsidizing the property monthly.
What expenses should I include?
Beyond the mortgage: property taxes, insurance, maintenance and repairs, a vacancy allowance (often 5–8% of rent), property management (8–10% if you hire it out), and any HOA fees. New investors routinely underestimate these — a rough rule is that operating expenses run about half of rent before the mortgage.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.