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Rental property calculator

See what a rental property really earns after vacancy, management, HOA dues, maintenance and taxes, with or without a mortgage, and the total return including the sale.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Nov 1, 2026

Example: a $300,000 condo rented for $2,100 a month, bought with cash.

Purchase
Rent and expenses
Over time
Mortgage (optional)

Taxes and transaction costs vary by location and by your tax situation: the suggested values are only a starting point.

Your inputs stay only on this browser and are not sent anywhere. Untick to delete them.

—Annual return (IRR)
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Cash year by year

Cash flow each year (rent minus expenses, tax and mortgage), the sale in the last year and the running total since the initial investment.

Tap the chart to see the values.

Where the rent goes in year one

Twelve months of rent split into vacancy, owner expenses, tax, mortgage and what is left.

Tap the chart to see the values.

Year by year

Nominal amounts each year. The last row shows the sale: market value minus selling costs, loan balance and tax on the gain.

Next step

Take this page’s results to another calculator with the fields already filled in.

See whether to rent or buy a home to live in →

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Rent collected = rent × (12 − vacant months); NOI = collected − management − owner-paid HOA/property tax − maintenance − insurance
Income tax = rate × (collected − management − owner-paid HOA/property tax); cash flow = NOI − tax − mortgage payments
Cap rate = year-1 NOI ÷ price; cash-on-cash = year-1 cash flow ÷ cash invested (down payment + closing costs + repairs)
Sale in year N = value × (1 − selling costs) − loan balance − tax × max(0, net value − total acquisition cost); IRR of the yearly flows
Fixed payment: monthly rate = (1 + annual rate)^(1/12) − 1

Assumptions and limits

  • Yearly flows in nominal terms; rent, HOA and insurance grow at the same rate; maintenance as a % of the current property value; no tenant defaults or major renovations. Payback uses cumulative cash flow without the sale.
  • Rental income tax and capital gains tax are effective rates you type in; deductions such as mortgage interest and depreciation, and depreciation recapture, are not modeled.

Official sources and references

Frequently asked questions

What is this calculator for?

It evaluates a rental property as an investment: what it earns from rent alone (cap rate), what is left in your pocket each year (cash-on-cash), how long the cash takes to come back and the annual return including the sale at the end (IRR). Use it to compare properties with each other and with other investments.

How do I read the example result?

The $300,000 condo, bought with $314,000 of cash (including closing costs and repairs), produces $13,325 of net operating income in year one, a 4.44% cap rate. After tax, $9,403 is left, or 2.99% a year on the cash invested. Selling after 10 years for about $423,000, the total return is 5.2% a year.

What is a good cap rate?

It depends on interest rates, location and property type. Residential rentals often trade at cap rates of roughly 4% to 8%. If high-quality bonds pay more than the cap rate with less risk and work, the property relies on appreciation to make up the difference.

Should I finance a rental property?

A mortgage boosts returns only when the property yields more than the loan costs. In the example, financing 75% at 6.75% means about $7,751 out of pocket in year one and a lower IRR (3.0%). Tick “Buy with a mortgage” to test your own numbers.

What expenses do I need to include?

Vacancy, property management, HOA dues, property tax, insurance, repairs and maintenance, and capital expenses such as roofs and appliances over time. Underestimating maintenance is the most common mistake; 1% of the property value a year is a common rule of thumb.

How are taxes handled?

The calculator applies the effective rate you enter to rent minus management fees and HOA/property tax paid by the owner, and a separate rate on the gain at sale. Real tax rules include deductions such as mortgage interest and depreciation and may recapture depreciation at sale; check with a tax professional.

What are the limits of this calculator?

It assumes steady rent, expense and price growth, with no defaults, major renovations or legal costs. Mortgage interest and depreciation deductions are not modeled. It is a simulation to compare scenarios, not investment or tax advice.

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Rental property analysis: cap rate, cash-on-cash return and IRR

A rental property earns in two ways: the net rent each month and appreciation when you sell. To compare it with other investments, take out of the rent everything the owner pays: vacancy, property management, HOA dues and property tax, maintenance, insurance and income tax.

Three metrics

Cap rate = net operating income ÷ purchase price; it compares properties without the effect of financing. Cash-on-cash = cash left in your pocket for the year ÷ cash invested; it shows the effect of the mortgage. IRR = the annual rate that accounts for the initial investment, the rents and the sale.

Example

A $300,000 condo with 3% closing costs and $5,000 in repairs, rented for $2,100 with 0.6 months of vacancy a year, produces $13,325 of net operating income in year one: a 4.44% cap rate. After a 22% tax on rent, $9,403 is left, or 2.99% on the $314,000 invested. With 3.5% annual appreciation and a sale after 10 years, the IRR is 5.2% a year.

MetricAll cashWith a 75% mortgage
Cash invested$314,000$89,000
Cash-on-cash (year 1)2.99%−8.7%
10-year IRR5.2%3.0%

Leverage cuts both ways

A mortgage raises returns only when the property yields more than the loan costs. At 6.75%, the payment exceeds the net rent in the example and the owner feeds the property every month.

Taxes

Rental income is usually taxable, and deductions (mortgage interest, depreciation, repairs) and capital gains rules vary by country. This calculator uses an effective rate you type in; check your situation with a tax professional.