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Investment Property Analyzer

Does the rental math work?

Enter the price, your loan, the rent, and the running costs. We’ll show whether the rent covers every bill each month, and what you’d likely make (or lose) after taxes if you held the property for years and then sold.

  1. Rent minus running costs

    Start with the rent, then subtract empty months, management, repairs, property tax, insurance, and HOA dues. What’s left is . NOI divided by the price is the , a quick way to compare properties as if you paid cash.

  2. Then the mortgage gets paid

    NOI minus your loan payments is your . Divide a year of it by the cash you put in to get your . Lenders compare the same income to the payment, called the .

  3. Wealth builds in more than one way

    Over the years you also gain from the tenant paying down your loan, , and tax savings from . We project each year, subtract selling costs and taxes at the sale, and turn it into one yearly return ().
The price and the rent move this result more than anything else, so look up what similar rentals nearby are listed for before you trust it. The other defaults are typical, slightly cautious US figures. Real estate investing 101 covers where rental returns come from and what goes wrong.
The property and your loan

What you'd pay, how much cash you'd put in, and the mortgage on the rest.

$
$
%
yr
$
Rent and running costs

What the tenant pays and what it costs to keep the property rented. Check similar listings nearby for a realistic rent.

$/ mo
%
% of rent
% / yr
% / yr
% / yr
$/ yr
$/ mo
Long-term assumptions

Guesses about the future that drive the multi-year projection. The defaults are moderate; try lower values to see how sensitive the deal is.

% / yr
% / yr
% / yr
% / yr
% of price
yr
%
Your tax situation

Used to estimate income tax on the rent, the value of depreciation, and the tax when you sell. Federal only.

%

Filing status

$

Left over each month, year 1

-$917

Per year: -$11,005 · Cap rate 3.54% · DSCR 0.56 · IRR -0.32%

Rent for the year$33,600
Lost to empty months−$1,680
Running costs−$17,754
Net operating income ()$14,166
Mortgage payments−$25,172
(before tax)-$11,005

Cap rate

3.54%

yearly NOI ÷ price (return if bought in cash)

Cash-on-cash (yr 1)

-10.38%

-$11,005 cash flow ÷ $106,000 you put in

Rent coverage (DSCR)

0.56

NOI ÷ loan payment; lender version: 1.04

Year-1 cash flow

-$11,005

per year, before income tax

Total profit if sold yr 10

-$4,824

after selling costs and taxes

Yearly return (IRR)

-0.32%

after tax, per year on your cash

What this means

After every running cost and the mortgage, this rental would cost you about $917 a month out of your own pocket in year 1, a -10.4% cash-on-cash return on the $106,000 you’d put in. The rent leaves $14,166 a year after running costs, and the mortgage takes $25,172 of it (a DSCR of 0.56). If you sold after 10 years, you’d be about $4,824 behind after selling costs and taxes, about -0.3% a year on your cash.

The long-term result leans on your 3% home value growth and 3% rent growth guesses; try lower numbers to see how much of the profit depends on them. Year 1 cash flow doesn’t depend on either guess.

What would change monthly cash flow

Rent $100/mo higher+$87/mo
Negotiate the price $20,000 lower+$194/mo
A 7% rate instead of 7.5%+$102/mo
Manage it yourself (no manager fee)+$213/mo

How your wealth builds over time

Each point shows where you’d stand if you sold at the end of that year. is the home’s value minus what you still owe.

Total profit if sold (cash flow + equity − costs and taxes) Equity built Cash flow so far, after tax
-$95,965-$21,336$53,294$127,923$202,552$277,182Yr 0Yr 2Yr 4Yr 6Yr 8Yr 10
YrHome valueEquityNOICash flow before taxCash flow after taxNet from saleTotal profit
1$412,000$114,766$14,166-$11,005-$11,005$85,926-$31,080
2$424,360$130,106$14,481-$10,690-$10,690$99,297-$28,399
3$437,091$146,048$14,797-$10,375-$10,375$109,583-$28,488
4$450,204$162,622$15,113-$10,059-$10,059$120,380-$27,749
5$463,710$179,857$15,427-$9,744-$9,744$131,495-$26,379
6$477,621$197,788$15,741-$9,431-$9,431$143,346-$23,959
7$491,950$216,447$16,051-$9,121-$9,121$155,802-$20,623
8$506,708$235,873$16,358-$8,814-$8,814$168,896-$16,343
9$521,909$256,104$16,660-$8,511-$8,511$182,664-$11,087
10$537,567$277,182$16,957-$8,215-$8,215$197,142-$4,824

Net from sale is what you’d walk away with after selling costs, paying off the loan, and taxes. Total profit adds the cash flow you’ve collected and subtracts the cash you put in.

A of 7% or more is generally good, though it varies by market (around 4% is normal in the Bay Area, Cleveland runs 8% or more); 5% or less is thin. A common target is 8% or more , but it ignores appreciation and loan paydown, so judge a deal on its total return too. A of 1.25 or more qualifies for most DSCR loans, but those lenders usually divide gross rent by (loan payment plus tax, insurance, and HOA) rather than NOI by the loan payment, so the lender version shown in the DSCR box is the one that counts for qualifying. It can be higher or lower than the first figure.

Rental profit is taxed at your bracket. (the building share of the price and closing costs, plus capitalized capex, over 27.5 years) creates paper losses limited by the ($25,000 below $100,000 AGI, phased out by $150,000). Losses above the allowance are suspended, with no current cash benefit. At sale, depreciation is taxed back (recapture, at the lesser of 25% or your bracket) on the §1250 unrecaptured slice, and long-term rates (0%, 15%, or 20%) apply to the rest. The 3.8% applies to rental profit and the whole sale gain to the extent your MAGI (AGI above plus the gain) exceeds $200,000 single or $250,000 married filing jointly. Property tax, maintenance, and capex each year are based on the home’s value at the start of that year. IRR uses your initial cash, each year’s after-tax cash flow, and the after-tax sale proceeds.

The model leaves out a , the QBI (§199A) deduction, using suspended losses in later years, state taxes, and BRRRR-style refinancing.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

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Terms used on this page

The rental terms this analyzer uses, from NOI to the passive-loss allowance.

NOI (net operating income)
A year of rent, minus vacancy and all running costs (property tax, insurance, repairs, management, HOA), but before mortgage payments. It shows what the property earns on its own. More
Cap rate
NOI divided by the purchase price: the yearly return you’d earn if you paid all cash, which lets you compare properties. 7% or more is generally good; 5% or less is thin, though it varies by market. More
Cash flow
What’s left after the rent pays every running cost and the mortgage. Positive cash flow puts money in your pocket; negative means you pay in each month.
Cash-on-cash return
A year of cash flow divided by the cash you put in (down payment plus closing costs). It ignores appreciation and loan paydown. More
DSCR (debt service coverage ratio)
The property’s income divided by its loan payments. 1.0 means the rent exactly covers the payment; lenders often want 1.25 or more. More
Vacancy
The share of the year a rental sits empty between tenants. One empty month is about 8% of a year’s rent.
Capex (capital expenditures)
Large, infrequent replacements such as a roof, heating and air conditioning, or a water heater. Investors set aside a yearly reserve so these bills don’t wipe out cash flow.
Depreciation
A yearly tax deduction for wear and tear on the building (not the land), spread over 27.5 years for residential rentals. It’s taxed back as recapture when you sell.
IRR (internal rate of return)
One yearly percentage that sums up an investment with cash going in and out at different times, including the sale. Here it’s after tax.
Passive-loss allowance
A rule that lets you deduct up to $25,000 a year of rental losses against other income if your AGI is under $100,000, phasing out completely by $150,000.

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