Rental Property Calculator
United States Uses U.S. federal housing program rules (FHA or VA). Figures are in U.S. dollars.
Rental property calculator: cap rate, cash flow, cash-on-cash return and DSCR, plus depreciation and the passive loss rules for your after-tax return.
Educational estimate only. Not a lending decision. Your numbers stay in this browser.
Results
How to read this: the verdict describes how much room your numbers leave, not a decision or an offer. Change any input to see how much the result moves.
Investing and retirement guides
These guides explain compounding, contribution projections, retirement targets, inflation, and real returns.
- Compound interest explained
- Investment return with contributions
- Retirement savings target
- Inflation and real returns
For all guide topics, open Guides. For source and estimate boundaries, read Calculation Methodology and Sources and Assumptions.
Assumptions and formula
Net operating income (NOI) is a year of rent less vacancy and operating costs: property tax, insurance, HOA, maintenance and management. The cap rate is NOI divided by the price. Cash flow is NOI less the mortgage payments, and cash-on-cash return divides it by the down payment and closing costs. DSCR is NOI over the mortgage payments; the gross rent multiplier is price over a year of rent.
For tax, the building (price and closing costs less the land share) is depreciated over 27.5 years under IRS Publication 527, and first-year mortgage interest is deductible. If that leaves a loss, up to $25,000 of it can offset other income for active participants, reduced by half of modified AGI over $100,000 and gone at $150,000 (Publication 925); the rest carries forward. The tax saved or owed at your rate gives the cash flow after tax.
Worked example
A $300,000 home renting for $2,400 a month, 25% down, 7% over 30 years: NOI $20,371, cap rate 6.79%, payments $1,497 a month, cash flow $2,408 a year, a 2.87% cash-on-cash return on $84,000. Depreciation of $8,989 and $15,678 of interest give a $4,295 tax loss; at $90,000 of income and a 22% rate it saves $945, so the cash flow after tax is $3,353 (3.99%). At $160,000 of income the loss is carried forward instead.
Frequently asked questions
Does depreciation make a rental property lose money on paper?
Often in the early years: the building is deducted over 27.5 years and mortgage interest is deductible, so a rental with positive cash flow can show a tax loss that saves tax, if your modified AGI is under $150,000.
What is a good cap rate for a rental property?
Many investors look for 5% to 10%: lower in expensive, growing areas, higher where prices are low and risk is higher. A $300,000 home renting for $2,400 a month with about $7,000 of costs has a cap rate near 6.8%.
What is cash-on-cash return?
The yearly cash flow after the mortgage divided by the cash you put in (down payment and closing costs). $2,408 of cash flow on $84,000 invested is 2.9%.
How is rental property depreciated?
The building, not the land, over 27.5 years (IRS Publication 527). On a $300,000 purchase with $9,000 of closing costs and 20% land, that is about $8,989 a year, which can turn positive cash flow into a tax loss.
Can I deduct rental losses against my salary?
Up to $25,000 a year if you actively participate and your modified AGI is $100,000 or less; the allowance falls by $1 for every $2 above that and is gone at $150,000 (IRS Publication 925). Losses you cannot use carry forward.
What is DSCR?
Debt service coverage ratio: NOI divided by the yearly mortgage payments. Lenders for investment loans often want 1.2 or more; 1.13 means the rent covers the mortgage with 13% to spare.
Is this a cap rate calculator too?
Yes: a rental property calculator, cap rate calculator, cash on cash return calculator and rental property cash flow calculator in one.
What is a good rental yield?
Gross rental yield is a year’s rent ÷ the price: $28,800 on a $300,000 home is 9.6%. The cap rate is the net yield after costs, and the cash-on-cash return is the ROI on the cash you put in, which this real estate investment calculator shows too.
How do I determine rental income?
Start with a year of rent, take off vacancy, then operating costs: what is left is net operating income. $2,400 a month is $28,800 a year; less 5% vacancy and about $7,000 of costs, the rental income before the mortgage is $20,371.
Sources
Sources reviewed 4 October 2026: checked against their current editions on that date.
- IRS Publication 527 (2025), Residential Rental Property: 27.5-year GDS recovery period, mid-month convention, land not depreciable.
- IRS Publication 925 (2025), Passive Activity and At-Risk Rules: $25,000 special allowance and its $100,000–$150,000 phase-out.
This page is an educational estimate, not personal financial or tax advice. Eligibility and individual circumstances can change the result.