Rental Property
Free Rental Property for financial. Enter your values to compare options, see amortization, and plan smarter. Free, formula-verified, no signup needed.
Formula
Cash Flow = NOI - Mortgage
NOI (Net Operating Income) = Gross rent - Expenses. Cash flow = NOI - Debt service. Cap rate = NOI ÷ Purchase price.
Worked Examples
Example 1: Complete Rental Property Analysis
Problem:$300,000 property, 20% down ($60K), $2,200/month rent. Calculate all key metrics.
Solution:Gross annual rent: $2,200 × 12 = $26,400\n\nExpenses:\nVacancy (8%): -$2,112\nProperty tax: -$3,600\nInsurance: -$1,200\nMaintenance: -$2,400\nManagement (10%): -$2,640\nTotal expenses: -$11,952\n\nNOI: $26,400 - $11,952 = $14,448\n\nMortgage ($240K, 7%, 30yr): $1,596/mo = $19,152/yr\n\nAnnual cash flow: $14,448 - $19,152 = -$4,704\nNegative! This deal doesn't cash flow.\n\nCap rate: $14,448 / $300K = 4.8%\nCash-on-cash: -$4,704 / $60K = -7.8%
Result:Negative cash flow - not a good deal at this price
Example 2: Making a Deal Work
Problem:Same property but negotiated to $260,000, rent raised to $2,400.
Solution:New gross rent: $2,400 × 12 = $28,800\n\nExpenses:\nVacancy (8%): -$2,304\nProperty tax: -$3,600\nInsurance: -$1,200\nMaintenance: -$2,080\nManagement (10%): -$2,880\nTotal: -$12,064\n\nNOI: $28,800 - $12,064 = $16,736\n\nMortgage ($208K, 7%, 30yr): $1,383/mo = $16,596/yr\n\nAnnual cash flow: $16,736 - $16,596 = +$140\nBarely positive but you also get:\n- Principal paydown: ~$4,200/yr\n- Depreciation tax benefit: ~$7,500\n- Potential appreciation\n\nCap rate: 6.4% | Cash-on-cash: 0.3%
Result:Marginally positive - total return better than cash flow shows
Example 3: House Hacking Strategy
Problem:Duplex $400K, 5% down (primary residence). Live in one unit, rent the other for $1,800/month.
Solution:Your costs:\nMortgage + PMI ($380K, 6.5%): $2,602/mo\nTaxes/insurance: $500/mo\nMaintenance: $200/mo\nTotal: $3,302/mo\n\nRental income: -$1,800/mo\n\nYour net housing cost: $1,502/mo\n\nCompare to renting:\nSimilar unit rent: $1,600/mo\nYou're paying LESS than renting while building equity!\n\nWhen you move out (after 1 year):\nBoth units rented: $3,600/mo\nExpenses: $3,302 + management\nPositive cash flow achieved.
Result:Live nearly free, then cash flow when you move
Frequently Asked Questions
How much down payment for investment property?
Typically 20-25% minimum for conventional loans. Investment properties require larger down payments than primary residences. Some options: 15% with PMI, house hacking (live in one unit, smaller down), DSCR loans (based on property income). Larger down payment = better cash flow but less leverage.
Should I manage the property myself?
Self-management saves 8-10% but requires time: tenant screening, rent collection, maintenance coordination, legal compliance, 3am calls. Worth it for: local properties, few units, hands-on personality. Property management makes sense for: distant properties, many units, limited time, or scaling.
What expenses should I include in a rental property analysis?
Include mortgage, property tax, insurance, HOA fees, property management (8-12% of rent), maintenance (1% of value/year), vacancy allowance (5-10%), utilities you cover, and capital expenditure reserves.
How do I estimate property value?
Three approaches: comparable sales (what similar properties sold for), income approach (NOI / cap rate), and cost approach (land value plus replacement cost minus depreciation). Lenders use appraisals that combine these methods.