Enter the purchase price, rent, expenses, and financing terms to see Net Operating Income, cap rate, monthly cash flow, and cash-on-cash return — the core metrics investors compare deals with.
Cap rate (capitalization rate) is Net Operating Income divided by purchase price, expressed as a percentage — it measures a property's return as if it were bought entirely in cash, with financing removed from the picture. There's no single universal "good" number since it varies heavily by market and property type, but many US residential investors look for roughly 5% to 10%, with lower cap rates typically showing up in higher-demand, lower-risk markets and higher cap rates in higher-risk or slower-growth areas.
Cap rate ignores financing entirely and measures the property's own performance against its full purchase price. Cash-on-cash return measures your actual cash return against only the cash you put in — down payment plus closing costs — after subtracting mortgage payments. Two identical properties can carry the same cap rate but very different cash-on-cash returns depending entirely on how each one is financed, which is why serious investors look at both, not just one.
Operating expenses include property tax, insurance, HOA fees, maintenance, and an allowance for vacancy — anything needed to keep the property running and rented, excluding the mortgage payment itself. Debt service (the loan payment) is deliberately excluded from NOI and cap rate, since those two metrics are meant to measure the property's own performance independent of how any particular buyer chooses to finance it.
This tool gives the quick investor-decision metrics — cap rate and cash-on-cash return — that are most useful for comparing multiple deals against each other before you buy. The companion Rental Property Calculator breaks out every line-item expense (management fee, maintenance, vacancy, and mortgage payment) in full monthly detail, which is more useful for ongoing budgeting once you already own the property.
Worked example: a $300,000 property with 20% down ($60,000), $6,000 closing costs, $2,200/month rent, $250 tax + $100 insurance + $50 HOA per month, 5% maintenance and 5% vacancy (both against rent), financed at 6.5% over 30 years: annual rent is $26,400, annual operating expenses come to $7,440, giving an NOI of $18,960 and a cap rate of 6.32%. The $240,000 loan carries a monthly payment of about $1,516.96 ($18,203.56/year in debt service), leaving an annual cash flow of about $756.44 — roughly $63.04/month — against $66,000 of cash invested, for a cash-on-cash return of about 1.15%. That thin cash-on-cash number despite a healthy cap rate is a common real-world pattern: the deal performs fine unlevered, but the financing terms here are eating most of the spread.
Want the full line-item operating budget for a property you already own or are managing? Use the Rental Property Calculator. Financing the purchase? See the Mortgage Calculator for the full amortization schedule.