Rental Property Investment Calculator
Example: $300K property with $2,500 rent = 10% gross yield
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.
Income vs expenses
Gross Yield
Annual rent ÷ purchase price
Monthly Cash Flow
Cap Rate
NOI ÷ property value
Cash-on-Cash Return
Annual cash flow ÷ total cash invested
Total Cash Needed
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. These are current-year metrics and do not project future appreciation or rent growth.
Methodology last reviewed: December 2022. How SparkCalc works
Sources: U.S. IRS: Publication 527, Residential Rental Property · U.S. IRS: Topic No. 414, Rental Income and Expenses · U.S. IRS: Rental Income and Expenses (Real Estate Tax Tips)
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. This calculator focuses on current-year income and expenses; it does not model future appreciation or rent growth.
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.
Related Calculators
You might also find these calculators helpful: Mortgage Calculator, and Investment Return Calculator.
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This calculator provides estimates for informational purposes only and is not investment advice. Actual returns depend on market conditions, vacancy, expenses, taxes, and many other factors. Consult a qualified investment professional.