Investment Scenario

Purchase Price ($)

Down Payment ($)

Mortgage Financing

Interest Rate (% APR)

Loan Term (years)

Operations

Monthly Gross Rent ($)

Monthly Operating Expenses ($) Taxes, insurance, HOA, property management, maintenance (exclude mortgage)

Financial Summary

Monthly Mortgage P&I	—
Net Operating Income (NOI)	—
Monthly Net Cash Flow	—
Capitalization Rate (Cap Rate)	—
Cash-on-Cash Return (CoC)	—

How to Evaluate a Rental Property

Rental property investing hinges on cash flow and yield metrics. A property with high rental income can still lose money if operating expenses and mortgage debt service exceed incoming revenue.

The Rental Property Formulas

These metrics are calculated as follows:

**Net Operating Income (NOI):** ***(Monthly Rent - Monthly Operating Expenses) × 12***
**Monthly Net Cash Flow:** ***Monthly Rent - Monthly Operating Expenses - Monthly Mortgage P&I***
**Capitalization Rate (Cap Rate):** ***NOI / Property Price × 100***
**Cash-on-Cash Return (CoC):** ***Annual Cash Flow / Cash Invested (Down Payment) × 100***

Cap Rate vs. Cash-on-Cash Return

The **Cap Rate** evaluates the property’s return potential as if it were purchased entirely in cash. The **Cash-on-Cash Return** measures the performance of the actual cash you invested, capturing the effects of mortgage leverage on your yield.

Disclaimer. This calculator is for informational purposes only. Operating costs can fluctuate based on occupancy, emergency repairs, local tax adjustments, and management fees.