🏢 Investment Tool
Real Estate Calculator
Analyze rental property investments with NOI, Cap Rate, Cash-on-Cash return, DSCR, GRM, and more. Full income statement with operating expenses breakdown.
NOI
Net Op. Income
CoC
Cash-on-Cash
Cap
Cap Rate
DSCR
Debt Coverage
Property & Financing
Purchase Details
$
%
$
%
Income & Expenses
Annual Income
$
%
$
Annual Operating Expenses
$
$
$
%
$
$
Monthly Cash Flow
$0
After all expenses
Cap Rate
0.0%
NOI / Price
Cash-on-Cash
0.0%
Annual CoC return
DSCR
0.00
Debt coverage ratio
GRM
0.0×
Gross rent multiplier
Total Cash Invested
$0
Down + closing
📋 Income Statement
📊 Investment Ratios
MetricValueStatus
📊 Income vs Expenses Breakdown
How to Analyze a Rental Property Investment
Our real estate calculator gives you the complete financial picture of a rental property investment. Enter the purchase price, financing details, income, and operating expenses to get NOI, Cap Rate, Cash-on-Cash return, DSCR, GRM, and more. For buying your primary home, use our house affordability calculator, mortgage calculator, and mortgage payoff calculator.
📐 Key Real Estate Formulas
NOI = Effective Gross Income − Operating Expenses
Cap Rate = NOI / Purchase Price × 100
Cash-on-Cash = Annual Cash Flow / Total Cash Invested × 100
DSCR = NOI / Annual Debt Service
GRM = Purchase Price / Annual Gross Rent
📊 What Good Numbers Look Like
- Cap Rate: 5–10% is typical; higher = better returns but more risk
- Cash-on-Cash: 8–12%+ is considered good for rental investment
- DSCR: Above 1.25 preferred by lenders; below 1.0 means negative cash flow
- GRM: Lower is better; 8–12× is typical in most markets
- Vacancy Rate: Conservative investors budget 8–10%
💡 The 1% Rule of Thumb
The 1% rule says monthly rent should be at least 1% of the purchase price:
- $200,000 home → $2,000/month rent minimum
- $350,000 home → $3,500/month rent minimum
It's a quick filter, not a complete analysis. Use our full calculator to model actual cash flow and returns after all expenses and financing costs.
⚠️ Common Investor Mistakes
- Underestimating vacancies — budget at least 7–10% even in hot markets
- Skipping maintenance reserves — budget 1% of property value per year minimum
- Ignoring management fees — 8–12% of gross rent if self-managing isn't feasible
- Projecting appreciation as cash flow — deals must work on rental income alone
- Using optimistic rent estimates — verify with actual comparable rentals
Frequently Asked Questions
A good cap rate depends on the market and property type. Generally, 5–7% is typical for lower-risk properties in stable urban markets; 8–12%+ for higher-risk markets or properties needing work. A higher cap rate means more income relative to price but often signals higher risk, worse location, or more management-intensive properties. Compare cap rates to similar properties in the same market rather than using national averages.
DSCR (Debt Service Coverage Ratio) measures whether a property's income covers its mortgage payments. DSCR = NOI ÷ Annual Debt Service. A DSCR of 1.0 means income exactly equals debt payments — any vacancy creates negative cash flow. Most lenders require DSCR of at least 1.20–1.25, meaning income is 20–25% above debt payments. A DSCR below 1.0 means the property operates at a loss — the investor must cover the shortfall from other income.
Cap rate ignores financing — it measures the property's intrinsic return as if it were purchased with all cash (NOI ÷ Price). Cash-on-cash return accounts for your actual financing and measures the return on cash you actually invested (Annual Cash Flow ÷ Total Cash Invested). If you finance the property, these two metrics will differ significantly. Investors use cap rate to compare properties; they use cash-on-cash to evaluate the return on their specific investment strategy.
Net Operating Income (NOI) = Effective Gross Income − Total Operating Expenses. Effective Gross Income is your gross scheduled rent minus vacancy losses plus other income. Operating expenses include property taxes, insurance, maintenance, management fees, HOA, and other costs — but NOT mortgage payments (debt service is calculated separately). NOI is a pre-financing metric that shows the property's earning power independent of how it's financed.
Most conservative real estate investors use 7–10% vacancy even in tight rental markets. This accounts for tenant turnover, time to re-lease, and unexpected vacancies. In hot markets with very low vacancy, some investors use 5%, but 8% is a commonly used benchmark that also partially covers credit losses. Using overly optimistic vacancy rates (0–3%) is one of the most common mistakes that makes weak deals appear profitable on paper.