Rental property income projection calculator


Inputs

Cost to purchase

$

Value: %


$

Value: %


$

Value: %


$

$
$

$

Monthly cash flow

$
$

Value: %

$
$
$
$

$

Value: %


Outputs

Year Monthly net cash flow Cash-on-cash
1
5
10
20
30






Overview / definitions

Overview

The above tool is a simple calculator that can be used to project the returns of a rental investment property (including financing, common expenses, and expected rent rate increases over time). You can read on below to see definitions for each terms and how they are used in the tool's calculations.

Definitions

Cost to purchase

  • Purchase price
    • The purchase price of the home
  • Down payment
    • If financing, the down payment required to secure the loan (typically 20%).
  • Closing costs
    • Total cost paid to finalize the real estate transaction, typically 3-6% of the home's purchase price.
  • Interest rate
    • The interest rate on the loan / mortgage.
  • Term in years
    • The term of the loan. Typically 30 years.
  • Financed amount
    • The total loan amount (purchase price of the home - the down payment).
  • Monthly mortgage payment
    • Monthly payment made to service the loan, sensitive to financed amount, interest rate, and loan term.
  • One-time renovations / repairs
    • Any costs needed to get property rent ready. Includes things like remodeling, new appliances, cleaning, general repairs, paint jobs, etc.

Monthly cash flow

  • Rent
    • The total monthly rent collected from the tenant.
  • Property mgmt
    • Fees associated with a property manager ($0 if you're not hiring one). You can read our write up about average property management costs here.
  • Vacancy %
    • The assumed % of the time the property will be vacant (while searching for tenants, switching leases, etc). 5% is a typical assumption.
  • Maintenance / repairs
    • You can read our writeup on the average maintenance costs for rental properties here.
  • CapEx
    • In addition to the one-time renovation/repair cost upon purchase, the cost for replacing parts of the property that wear down over time. Includes items like a new water heater, replacing windows / doors, replacing HVAC, etc.
  • Insurance
    • Cost to ensure property (typically expressed as a percentage of the property's value).
  • Property taxes
    • Annual taxes paid on the value of property, varies from state to state.
  • Expenses subtotal
    • Total of all recurring expenses.
  • Annual rent % increase (rent + expenses)
    • The assumed percentage the rent will grow each year. Expenses are also assumed to grow at the same percentage rate.


For a higher-level overview of calculating the return on a rental investment you can read our post here.