Rental Property Investment Calculator
Evaluating a rental property investment? This calculator helps you analyze the potential returns including gross yield, after-tax yield, cap rate, and monthly cash flow. Enter the purchase price, expected rent, and expenses to see if the numbers work.
How We Calculate This
Gross Yield = Annual Rent ÷ Purchase Price. After-Tax Yield = (NOI - Income Taxes) ÷ Purchase Price. Cap Rate = NOI ÷ Property Value. Cash-on-Cash = Annual Cash Flow ÷ Cash Invested.
Frequently Asked Questions
What is gross yield?
Gross yield is the annual rental income divided by the purchase price, expressed as a percentage. It provides a quick way to compare properties before accounting for expenses.
What is the difference between gross yield and after-tax yield?
Gross yield ignores all expenses and taxes. After-tax yield accounts for operating expenses and income taxes on rental profits, giving a more realistic picture of your actual return.
What is a good cash-on-cash return?
Most investors target 8-12% cash-on-cash return. However, this varies by market and risk level. Some investors accept lower returns in appreciation markets.
What is cap rate?
Cap rate (capitalization rate) is the property's Net Operating Income divided by its value. It measures return as if you paid all cash. Higher cap rates = higher returns but often higher risk.
How much should I budget for maintenance?
Budget 1% of property value annually for maintenance, or use the 50% rule (50% of rent goes to expenses excluding mortgage). Older properties need more.
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You might also find these calculators helpful: Mortgage Calculator, and Investment Return Calculator.