Real Estate Investment Calculator

Comprehensive property investment analysis with multiple calculation methods. Analyze NOI, cap rate, cash flow, cash-on-cash return, DSCR, appreciation, and total ROI for rental properties.

NOI = Effective Gross Income - Operating Expenses | Cap Rate = NOI / Purchase Price * 100 | Cash Flow = NOI - Debt Service | Cash-on-Cash Return = Annual Cash Flow / Total Cash Invested * 100 | DSCR = NOI / Annual Debt Service | Total ROI = (Cash Flow + Appreciation + Principal Paydown) / Cash Invested * 100
Example: $300k property, $60k down (20%), $2,500/mo rent. $3,600 taxes, $1,200 insurance, 5% vacancy, 10% property mgmt, 7% rate, 30yr. Results: NOI $22,320, Cap Rate 7.44%, Annual Cash Flow $2,493, Cash-on-Cash 2.91%, DSCR 1.13. With 3% appreciation: Total ROI ~15% including equity buildup.

What is a good cap rate for rental property?

Cap rates vary by location and property type. Generally: 4-6% in expensive, stable markets (e.g., major cities), 7-10% in average markets, 10%+ in emerging or higher-risk areas. Multifamily typically 5-8%, commercial 6-10%, retail 5-7%. Higher cap rate = higher potential return but also higher risk.

What is the difference between NOI and cash flow?

NOI (Net Operating Income) = Income - Operating Expenses, but excludes debt service (mortgage payments). Cash Flow = NOI - Debt Service. NOI measures property performance independent of financing. Cash Flow shows actual money in your pocket. A property can have positive NOI but negative cash flow if mortgage is too high.

What is a good cash-on-cash return?

Most investors target 8-12% cash-on-cash return for rental properties. 8-10% is considered good, 10-12% is excellent, 12%+ is exceptional. This metric shows annual cash flow relative to your actual cash invested (down payment + closing costs). Compare to alternative investments and account for appreciation potential.

Should I use the 1% or 2% rule for rental properties?

The 1% rule: monthly rent should equal 1% of purchase price ($200k property = $2k/month rent). The 2% rule is harder to find but indicates strong cash flow. These are quick screening tools, not definitive. Use comprehensive analysis including all expenses, vacancy, CapEx, and debt service for accurate evaluation.

What is the DSCR and why does it matter?

DSCR (Debt Service Coverage Ratio) = NOI / Annual Debt Service. It shows if property income covers mortgage payments. DSCR > 1.0 means property covers debt. Lenders typically require 1.2-1.25 DSCR for commercial loans. DSCR of 1.25 means NOI is 25% higher than debt payments, providing a safety cushion.

How do I calculate total ROI including appreciation?

Total ROI = (Annual Cash Flow + Annual Appreciation + Principal Paydown - Annual Costs) / Cash Invested * 100. Include tax benefits if applicable. Many investors see 15-25% total return when combining 8-10% cash flow, 3-5% appreciation, and 3-5% equity from principal paydown. Track all components separately.