Real Estate Investment Calculator
Analyze rental property ROI, cash flow, cap rate, and 10-year equity projections.
Analyze the profitability of a rental property purchase, including monthly cash flow, cap rate, cash-on-cash return, and a 10-year equity projection.
How Real Estate Investment Calculator Works
Net Operating Income (NOI) is your effective annual rent (after subtracting a vacancy allowance) minus operating expenses — property tax, insurance, maintenance, and property management fees — but excluding the mortgage payment. Cap rate is then NOI ÷ Purchase Price, a common metric for comparing properties independent of financing.
Monthly cash flow is NOI minus the annual mortgage payments (principal and interest), divided by 12. Cash-on-cash return relates that same annual cash flow to only the cash you actually put in — down payment plus closing costs — rather than the full purchase price, which is why it can differ substantially from the cap rate, especially with financed purchases.
The 10-year equity projection compounds the property's value at your assumed annual appreciation rate while simultaneously amortizing down the mortgage balance, so you can see how your ownership stake (equity) grows from both loan paydown and price appreciation over time.
See It In Action
Who Uses Real Estate Investment Calculator and Why
- Analyzing whether a rental property purchase would generate positive monthly cash flow after all expenses and the mortgage.
- Comparing the cap rate of a potential deal against typical market benchmarks, independent of financing terms.
- Checking cash-on-cash return to see how efficiently your actual cash invested (down payment + closing costs) is being put to work.
- Projecting how much equity a property could build over 10 years through a combination of appreciation and loan paydown.
Mistakes to Avoid
- Judging a deal by cap rate alone — cap rate excludes the mortgage payment entirely, so a property can show a perfectly reasonable cap rate while still being cash-flow negative once debt service is factored in, especially with a smaller down payment.
- Forgetting to subtract a vacancy allowance from gross rent before calculating NOI — using 100% occupancy in the projection overstates income and makes a deal look better than it will likely perform in practice.
- Comparing cap rate and cash-on-cash return as if they measure the same thing — cap rate is calculated against the full purchase price, while cash-on-cash return is calculated against only your actual cash invested, so the two numbers can diverge substantially depending on financing.
Tips for Best Results
- Use the break-even rent figure to stress-test a deal — it shows the minimum rent needed to cover the mortgage and operating expenses, which is useful for judging how much cushion you have if rents come in lower than expected.
- Run the same property at a couple of different down payment sizes — since debt service is what drives cash flow negative in many cases, a larger down payment can turn a cash-flow-negative deal into a positive one, at the cost of tying up more capital.
Fixing Common Problems
My cap rate looks fine but my cash flow is negative. — This is a common and expected outcome, not an error — cap rate ignores the mortgage payment entirely, so it\'s normal for a property to look profitable on an NOI basis while still losing money monthly once debt service is subtracted, especially with a smaller down payment.
Terms Explained
Net Operating Income (NOI): Effective rental income (after vacancy) minus operating expenses, excluding the mortgage payment.
Cash-on-cash return: Annual cash flow divided by the actual cash you invested (down payment plus closing costs), rather than the full purchase price.