Calculate rental property returns including cash-on-cash, cap rate, IRR, and cash flow with vacancy and maintenance assumptions.
Enter the purchase price, down payment, loan terms, rent, and expense assumptions, and the tool builds the operating statement the way lenders do: vacancy, maintenance, taxes, and insurance come off gross rent before any return is quoted. From net operating income it derives cap rate, cash flow, cash-on-cash, and an IRR over the hold period you set. The surprise most buyers hit: a deal can show negative cash flow and still earn a strong IRR, because the IRR also counts mortgage paydown and the equity you take out at sale.
A concrete input and expected output from the current implementation.
Input
Price $200,000; down payment $50,000; loan $150,000 at 6% for 30 years; rent $1,800/month; vacancy 5%; maintenance 10% of rent; taxes $2,400/year; insurance $1,200/year; hold 5 years; sale price $240,000; selling costs 6%.
Expected output
Mortgage: $899/month. Annual cash flow: $3,968. Cash-on-cash: 7.9%. Cap rate: 7.4%. IRR (5-year hold): about 18%.
Gross rent of $21,600 minus vacancy ($1,080), maintenance ($2,160), taxes, and insurance leaves net operating income of $14,760 - 7.4% of the $200,000 price. After the $10,792 annual mortgage, $3,968 remains, which is 7.9% of the $50,000 down payment; the IRR reaches roughly 18% because the year-5 sale adds about $86,000 of equity ($225,600 net proceeds minus the $139,600 loan balance) on top of that year's cash flow.
Annual gross rent is reduced by vacancy and a maintenance reserve (defaults of 5% and 10% of gross rent, both adjustable) plus property taxes and insurance. The result is net operating income. Cap rate divides NOI by purchase price. Cash flow subtracts annual debt service from NOI; cash-on-cash divides that by the down payment plus any closing costs entered.
Each year of the hold gets its projected cash-flow figure. In the final year, the tool adds net sale proceeds: sale price minus selling costs, minus the loan balance remaining at that point. IRR is the discount rate that makes the year-by-year flows plus the final sale equal the cash you put in. It is the only number here that combines rent, appreciation, and financing.
Because the cap rate ignores debt. It divides net operating income by the full purchase price, before any mortgage payment. Cash-on-cash subtracts the annual debt service first. When your mortgage rate is above the cap rate, the loan costs more than the property earns and cash flow goes negative - the property is fine, the financing is what bleeds it.
No. Every number here is pre-tax - the tool does not model depreciation, the mortgage interest deduction, capital gains, or your marginal rate. An after-tax return can be noticeably lower, or higher in early years when depreciation shelters income. For tax planning, work from IRS Publication 527 and a tax professional.
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