Cap rate is the net operating income (rent minus operating expenses) divided by the property price. It measures the return of a property before financing, so it works well for comparing different properties.

What is a good rental property return?

Many investors look for 1% of purchase price in monthly rent, a cap rate of 6% or more, and positive cash flow after all costs. Results vary heavily by market.

Rental Property Calculator

Cash flow, cap rate, cash-on-cash return and profit at a glance.

Property Purchase

Property Price ($)

Down Payment (%)

Closing Costs ($)

Mortgage Rate (% p.a.)

Mortgage Term (years)

yrs

Monthly Rent ($)

Vacancy Rate (%)

Property Tax (% of price / yr)

Insurance (% of price / yr)

Maintenance (% of price / yr)

Property Management (% of rent)

Annual Appreciation (%)

Selling Costs (%)

Holding Period (years)

yrs

Monthly Cash Flow

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Cap Rate

—

Cash-on-Cash Return

—

Total Return

—

Est. Profit

—

Cumulative Profit by Year

Understanding the metrics

Cash Flow — rent collected after vacancy, minus tax, insurance, maintenance, management and mortgage. Positive is the goal.
Cap Rate — operating income before mortgage divided by price. Best for comparing properties without financing.
Cash-on-Cash Return — annual cash flow divided by your cash investment (down payment + closing costs).
Total Return / Profit — includes cash flow over the holding period plus the gain on sale after appreciation and selling costs.

Rental Property FAQ

What is the 1% rule?▶

The 1% rule says monthly rent should be at least 1% of the purchase price. A property priced at $30,00,000 should rent for about $30,000 a month to be a solid investment.

Should I include vacancy in my analysis?▶

Yes — properties are rarely rented 100% of the time. A 5–10% vacancy allowance gives a much more realistic cash flow estimate.