Real Estate ROI Calculator
Calculate cash flow, cap rate, and cash-on-cash return for a rental property. Compare property price, expenses, mortgage payment, and rental income.
Evaluating a rental property: beyond the purchase price
Successful real estate investing is about more than just buying a property; it is about understanding the relationship between income and expenses. This calculator helps you focus on three key metrics: cash flow, cap rate, and cash-on-cash return.
Cash Flow is the money left over after all bills are paid. Cap Rate (Capitalization Rate) measures the property's natural yield as if you paid all cash, helping you compare different properties regardless of how they are financed. Cash-on-Cash Return measures the yield on the actual cash you invested, which is crucial for understanding how hard your money is working for you.
Don't forget the "hidden" expenses
New investors often forget to account for vacancy rates and maintenance. A property that looks great on paper can become a burden if you don't set aside 5-10% of the rent for future repairs or periods when the unit is empty. Always include a buffer in your "other monthly expenses" to ensure your analysis is realistic.