Rental Property ROI & Cash-on-Cash Calculator
Analyze rental cash flow, cash-on-Cash return, cap rate, and equity buildup over a multi-year hold.
Key concepts
Cash-on-cash return
Annual pre-tax cash flow divided by the cash you actually invested (usually the down payment).
Cap rate
Net operating income divided by purchase price — useful for comparing properties before financing.
What this tool does
Why rental ROI math matters
A property can look cash-flow positive on rent alone and still destroy returns once vacancy, taxes, insurance, maintenance, management, and mortgage payments are included. This calculator models those frictions so you can stress-test deals before you commit six figures.
How to use this tool
Enter purchase price, financing, rent, and operating costs. Compare Scenario B to test a lower price, different rent, or another interest rate. The chart shows cumulative cash flow across your hold period while the table tracks equity as the loan amortizes and the property appreciates.
Formulas used
Cash-on-cash = Annual cash flow / Cash invested Monthly cash flow = Effective rent − Mortgage − Operating expenses Cap rate = NOI / Purchase price
Effective rent reduces gross rent by vacancy. Operating expenses include taxes, insurance, HOA, maintenance, and management. Mortgage payment uses standard amortization. Equity equals projected property value minus remaining loan balance.
Worked example
Buy a $350,000 rental with 20% down at 6.5% for 30 years. Gross rent is $2,800/month with 5% vacancy, $4,200 taxes, $1,800 insurance, 5% maintenance, and 8% management. After mortgage and expenses, monthly cash flow and cash-on-cash return update instantly. Extend the hold to 15–30 years to see whether cumulative cash flow plus equity growth justifies the risk versus stocks or another property.
Decision checklist before you buy
0/5 checked
Tick items as you validate your decision.
Common mistakes
- Using best-case rent with zero vacancy.
- Ignoring CapEx (roof, HVAC, appliances) beyond routine maintenance.
- Treating appreciation as guaranteed cash.
- Forgetting closing costs and cash reserves in total capital required.
Methodology on this page
Projections are nominal and educational. Appreciation is constant; rents and expenses do not inflate annually in the base model. Financing uses fixed-rate amortizing loans.
Read the full FinTools4U methodology →Frequently asked questions
What is a good cash-on-cash return?
Targets vary by market and risk tolerance. Many investors look for mid-to-high single digits or better after realistic expenses — always compare against your alternatives.
Does this include income taxes?
No. Results are pre-tax educational estimates. Depreciation, interest deductibility, and filing status can change after-tax returns.
Can I compare two properties?
Yes. Enable Scenario B to change price, rent, or rate and compare cumulative cash flow on the chart.
Is appreciation included in cash-on-cash?
Cash-on-cash uses annual operating cash flow only. Appreciation appears in equity and property value columns.
Are closing costs in cash invested?
This version treats cash invested as the down payment for cash-on-cash. Add closing costs manually if you want a more conservative denominator.
Sources & further reading
- Investor.gov — Real estate investing basics — Educational overview of real estate investment risks.