Analyze rental property investments with cash flow, cap rate, cash-on-cash return, ROI, and mortgage payment calculations.
Cash flow is the number that decides a deal, and it is not the rent. Enter the purchase price, down payment, loan rate and term, expected rent, and operating costs; the tool separates the monthly mortgage payment (principal and interest only) from true net cash flow, then reports cap rate, cash-on-cash return, and ROI. What surprises most first-time buyers is how far the mortgage alone reaches: at 6.5% interest, a $160,000 loan costs about $1,011 a month. A rent that looks generous next to the payment can still come out negative once taxes, insurance, management, and vacancy are added.
A concrete input and expected output from the current implementation.
Input
Purchase price: $200,000. Down payment: 20% ($40,000). Loan: 30-year fixed at 6.5%. Expected rent: $1,800/month. Property tax: $200/month. Insurance: $100/month. Management: 8% of rent. Vacancy: 5% of rent. Maintenance: $75/month.
Expected output
Monthly mortgage payment (P&I): $1,011. Operating costs: $609/month. Total monthly cost: $1,620. Monthly cash flow: $180. Annual cash flow: $2,160. Cap rate: 7.15%. Cash-on-cash return: 5.4%.
The $1,011 payment is the standard 30-year amortization of the $160,000 loan at 6.5%. Cash flow is $1,800 minus that payment and the $609 of operating costs. The 7.15% cap rate excludes the loan entirely (annual NOI of $14,292 divided by price), while cash-on-cash divides the $2,160 annual cash flow by the $40,000 down payment; the spread between the two is the cost of financing.
The payment uses the standard amortization formula M = P x r(1+r)^n / ((1+r)^n - 1), where P is the amount borrowed, r is the annual rate divided by 12, and n is the number of monthly payments. Only principal and interest are in this figure. Property tax, insurance, and HOA fees are handled as separate monthly expense inputs, not folded into the loan.
Cap rate divides annual net operating income (rent minus operating costs, before the mortgage) by purchase price, so it measures the property's yield independent of financing. Cash-on-cash return divides annual net cash flow by cash invested (down payment plus any closing costs), so it measures the return on your own money. ROI is broader still: it counts gains that never reach your bank account, such as principal paydown, so it typically runs highest of the three.
Use comparable rents from local listings for the same bedroom count, and take the conservative end of the range. The vacancy field is your buffer for turnover and missed rent: a property that only works with the optimistic rent and 5% vacancy is a property that does not work. Re-run with vacancy at 8-10% to see the downside before you commit.
Only in the operating sense. The mortgage line is principal and interest, and the principal portion is equity you cannot spend without selling or refinancing. Capital repairs and legal costs are absent unless you budget them through the maintenance field. Read cash flow as the operating result and judge total profit from the cap rate, cash-on-cash, and ROI figures together.
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