Rental property cash flow calculator

What this rental property calculator actually measures

A rental property produces two completely different numbers, and mixing them up is the single most common mistake new investors make. The first is net operating income (NOI): what the property earns after vacancy and operating expenses but before the mortgage. The second is cash flow: what is left in your bank account after the lender is paid. NOI is the number an appraiser capitalizes into a value. Cash flow is the number that keeps you solvent.

This calculator computes both, plus the four return metrics professional underwriters check before writing an offer: cap rate, cash-on-cash return, DSCR and the gross rent multiplier. Change any input and all of them move together — because in a real deal they always do.

• Cap rate tells you what you paid relative to the property’s unlevered earnings — it is the same whether you pay cash or finance 80%.
• Cash-on-cash return tells you what your actual equity is earning after debt service — it improves as leverage increases, until it does not.
• DSCR is the lender’s number: NOI divided by annual debt service. Most investor loans require 1.20x to 1.25x.
• Gross rent multiplier is the crude screen — price divided by annual gross rent. Under 8x is cheap in most US markets, over 12x is expensive.

The formulas behind the numbers

Every result in this tool is a standard underwriting identity, not a proprietary black box. Here is the debt-service formula in full, because it is the one that trips people up: lenders quote an annual rate, but amortization happens monthly.

M = P × [ r(1 + r)^n ] / [ (1 + r)^n − 1 ]

where  P = loan amount
       r = annual rate ÷ 12
       n = term in years × 12

The one-percent rule and other fast filters

Before you underwrite a deal in detail, screen it. The one-percent rule says monthly rent should be at least 1% of the purchase price — a $325,000 house needs $3,250 rent. It is crude, it fails in high-appreciation coastal markets, and it is still the fastest way to reject 80% of listings without opening a spreadsheet.

Two more filters are worth running in parallel. The 50% rule assumes operating expenses (not including the mortgage) will consume half of gross rent — useful for a quick sanity check, though it breaks down for properties with high taxes or HOA fees. The break-even occupancy calculation tells you how full the property must stay just to cover its own costs; anything above 90% is a deal with no margin for error.

• One-percent rule: rent ÷ price ≥ 1% — a fast screen, not a decision.
• Break-even occupancy: (operating expenses + debt service) ÷ gross rent. Below 85% is comfortable.
• Expense ratio: operating expenses ÷ effective gross income. Above 50% on a residential property deserves an explanation.

What is inside the downloadable Excel model

The calculator above is the fast pass. The download is the working file: three linked tabs, live formulas rather than pasted values, and every assumption isolated in a blue input block at the top of the first sheet so you can run scenarios without touching a formula.

Tab 2 is a full 360-period amortization schedule with a cumulative interest column and an equity column that combines principal paydown with an appreciation assumption you control. Tab 3 shows the monthly waterfall and a 10-year projection that grows rent and expenses at your escalation rate, including the loan balance in each year pulled straight out of the amortization tab.

• Every KPI on tab 1 is a formula referencing the assumption block — edit the purchase price and cap rate recalculates.
• The amortization tab includes a running equity column so you can see the year the deal breaks even.
• The 10-year projection pulls the loan balance from the amortization schedule, not a hard-coded number.
• Works identically in Google Sheets: File → Import → Upload.

Six inputs investors get wrong

Underwriting errors are rarely mathematical — they are assumption errors. These are the six inputs that change the answer most, and the ones professional underwriters check first.

• Property taxes based on the seller’s assessment instead of the reassessed value after your purchase. In states with reassessment on sale, this can double the line item.
• Maintenance at 0% because "the property is turnkey". Every property has a roof, a water heater and a tenant who will eventually call.
• Property management at 0% because you plan to self-manage — then you move, or you buy property three. Price it in from day one and treat self-management as a bonus.
• Insurance quoted as a homeowner policy rather than a landlord/DP-3 policy, which typically costs 15–25% more.
• Closing costs omitted from the cash invested figure, which inflates cash-on-cash return by 10–20%.
• Rent taken from the listing instead of a rent estimate you actually verified against three comparable rentals that are currently vacant or recently leased.