Real estate investment analysis

Rental Property ROI Calculator

Estimate net operating income, cap rate, annual cash flow, expense ratio, and cash-on-cash return.

Estimated annual performance

Annual cash flow

$1,690

After entered operating costs and debt service.

Cash-on-cash return

2.1%

On $80,000 invested cash.

Net operating income

$21,490

Cap rate

7.2%

Gross potential income$34,800

Vacancy loss−$1,680

Effective gross income$33,120

Operating expenses−$11,630

NOI$21,490

Annual debt service−$19,800

Excludes appreciation, income taxes, depreciation, capital expenditures beyond entered reserves, and sale proceeds.

How the returns are calculated

NOI is effective rental income minus operating expenses, before mortgage payments. Cap rate divides NOI by purchase price. Cash-on-cash return divides cash flow after debt service by down payment, closing costs, and initial renovations.

Important limitations

Maintenance and management are percentage estimates; major capital replacements may require separate reserves.
Mortgage payment should include principal and interest only to keep property taxes and insurance from being counted twice.
Excludes appreciation, depreciation, income tax, financing fees not entered, sale costs, and future rent or expense growth.

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Planning guide

Read the complete guide →

Understand this estimate before using it

Quick answer

What does the Rental Property ROI Calculator do?

Estimate cash flow, cap rate, and cash-on-cash return. It builds gross income, operating expenses, net operating income, debt service, cash flow, cap rate, and cash-on-cash return from the entered property assumptions.

Formula and calculation method

It builds gross income, operating expenses, net operating income, debt service, cash flow, cap rate, and cash-on-cash return from the entered property assumptions.

The result is only as reliable as the inputs. Use current balances, rates, fees, dates, and documents; then change uncertain assumptions to see whether the conclusion remains stable.

How to interpret the result

Treat the output as a comparison or planning range, not a quote, approval, eligibility decision, tax return, or prediction. Review the breakdown—not only its headline number—and read every stated exclusion.

For current background, review HUD homebuying resources. Product documents and official program tools control when they differ from this educational model.

Worked scenario

Put the result in context

For a $400,000 property, list acquisition cash, annual operating income and expenses, financing, reserves, and expected selling costs separately. Test a lower rent or sale value rather than assuming the base case is certain.

This scenario illustrates the method; it is not a quote, forecast, recommendation, or substitute for entering your actual facts.

Before you calculate

Gather current information before changing the defaults. A result based on verified records is more useful than a precise answer built from guesses.

purchase price and cash invested (down, closing, renovations)

Check the date, unit, and source of this input before entering it.

rent, other income and vacancy

Check the date, unit, and source of this input before entering it.

operating expenses (tax, insurance, maintenance, management, utilities)

Check the date, unit, and source of this input before entering it.

the mortgage payment

Check the date, unit, and source of this input before entering it.

What the result can answer

It can show how the entered assumptions interact, provide a consistent comparison, and reveal whether changing one important input materially changes the estimate.

What the result cannot decide

It cannot confirm approval, eligibility, market pricing, future performance, legal or tax treatment, contract quality, or whether the choice fits every part of your finances.

A practical next-step workflow

01 · Verify
Compare the inputs with current statements, quotes, official rules, and product documents.
02 · Stress-test
Run a second case with a less favorable value for the mortgage payment.
03 · Confirm
Check both the cap rate and the cash-on-cash return, and treat vacancy, maintenance and management as real expenses, not optional ones before acting.

Frequently asked questions

Does cap rate include the mortgage?

No. Cap rate generally divides property net operating income before financing by property value or acquisition price.

Is rent versus buy only a financial decision?

No. Flexibility, stability, maintenance responsibility, and personal preferences also matter.

What can make this estimate differ from an actual result?

Timing, rounding, rate changes, fees, taxes, eligibility rules, product conventions, and facts not requested by this focused calculator can all create differences.

Which inputs deserve a second scenario?

Retest any input that is quoted rather than fixed, depends on future behavior, or materially changes the result. Conservative and optimistic cases reveal more than false precision.

What should I verify before making a decision?

Verify current statements, disclosures, official rules, taxes, fees, cancellation or prepayment terms, and the consequences of a less favorable outcome.

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Prepared by Loan Lyze Editorial and reviewed under the Loan Lyze editorial framework on November 8, 2026. Educational estimate only. See our methodology, editorial policy, and corrections policy.

Estimate rental performance

How the returns are calculated

Important limitations