Rental Property Calculator
Analyze rental property investments with cash flow projections, NOI, cap rate, cash-on-cash return, and investment rule screening (1% rule, 50% rule, GRM).
Your Monthly EMI
โน1,996
Principal
โน3,00,000
Total Interest
โน4,18,527
Total Payable
โน7,18,527
Breakdown
Principal: โน3,00,000 (42%)
Total Interest: โน4,18,527 (58%)
Interest-to-Principal: 139.5%
๐ Interactive EMI Breakdown
Principal vs Interest
Principal: โน3.00 L
Interest: โน4.19 L
Year-by-Year Payment Split
Loan Scenario Comparison
| Metric | Your plan | +1% Interest (8.0%) | +12 Months (372mo) |
|---|---|---|---|
| Monthly EMI | โน1,996 | โน2,201 โ โน205 | โน1,977 โ โน19 |
| Total Interest | โน4,18,527 | โน4,92,466 โ โน73,939 | โน4,35,510 โ โน16,983 |
| Total Payable | โน7,18,527 | โน7,92,466 | โน7,35,510 |
๐ How Rental Property is Calculated
Calculate gross income
$2,000 rent ร 12 months= Gross: $24,000/yr
Subtract vacancy & expenses
$24,000 โ $1,200 vacancy โ $9,600 expenses= NOI: $13,200
Subtract mortgage
$13,200 โ $1,597/mo ร 12= Cash flow: -$5,964/yr
Calculate returns
Cap rate = NOI/Price, CoC = CF/Cash invested= Cap: 4.4%, CoC: varies
Rate Comparison
Rental Property
4-10% cap rate
Active income | Leverage | Tax benefits
REITs
4-8% yield
Passive | Liquid | Diversified
House Flipping
10-20% per flip
Active | Short-term | Higher risk
๐
The Numbers Don't Lie
Most rental property failures come from not running the numbers properly before purchasing. Always stress-test: What if vacancy is 10% instead of 5%? What if a $10K repair hits in year 1? What if interest rates rise when you refinance? If the deal still works under pessimistic assumptions, it's likely a solid investment.
๐ก What Is Rental Property Investing?
Key Rental Property Metrics
| Metric | Formula | Good Target | What It Tells You |
|---|---|---|---|
| Cap Rate | NOI / Purchase Price | 5-10% | Return before financing |
| Cash-on-Cash | Annual Cash Flow / Cash Invested | 8%+ | Return on your actual cash |
| NOI | Effective Income โ Operating Expenses | Positive | Property profitability before mortgage |
| GRM | Price / Gross Annual Rent | โค 15x | Quick price-to-rent comparison |
Quick Screening Rules
- 1% Rule: Monthly rent โฅ 1% of purchase price. $300K property โ needs โฅ $3,000/month rent
- 50% Rule: Operating expenses โ 50% of gross income. The other 50% covers mortgage + profit
- 70% Rule (flipping): Purchase price โค 70% of After-Repair Value (ARV) minus repair costs
- 2% Rule: More aggressive version of 1% rule. Harder to find but excellent cash flow
Operating Expense Breakdown
Typical operating expenses for a rental property run 40-50% of gross rental income:
| Expense | Typical % | Example ($2K/mo rent) |
|---|---|---|
| Property Tax | Varies by location | $3,600/yr |
| Insurance | ~5% | $1,200/yr |
| Maintenance/Repairs | 10% | $2,400/yr |
| Property Management | 8-12% | $2,400/yr |
| Vacancy | 5-10% | $1,200/yr |
| HOA (if applicable) | Varies | $0-$500/mo |
| Total | 40-50% | $10,800+/yr |
Tax Benefits of Rental Property
- Depreciation: Deduct the building value (not land) over 27.5 years. On a $300K property with $240K building value, that's $8,727/year in paper losses โ reducing taxable income even if the property appreciates
- Expense deductions: Mortgage interest, property taxes, insurance, repairs, management fees, travel to property, and professional services are all deductible
- 1031 Exchange: Defer capital gains taxes by reinvesting sale proceeds into a like-kind property within 180 days
- Pass-through deduction: Rental income may qualify for the 20% Qualified Business Income (QBI) deduction
Other Real Estate Investment Options
| Rental Property | REITs | House Flipping | Wholesaling | |
|---|---|---|---|---|
| Capital Needed | High ($50K+) | Low ($100+) | Medium ($30K+) | Low ($0-$5K) |
| Time Commitment | Medium-High | None (passive) | High | High |
| Cash Flow | Monthly rent | Quarterly dividends | One-time profit | One-time fee |
| Appreciation | Yes | Yes (share price) | No (sold quickly) | No |
| Tax Benefits | Excellent | Good | Ordinary income | Ordinary income |
| Liquidity | Very low | High | Medium | High |
Example: $300,000 property with 20% down ($60,000). Rent $2,000/mo. Expenses ~$9,600/yr. NOI: $13,200/yr. Mortgage: $11,960/yr. Cash flow: $1,240/yr ($103/mo). Cap rate: 4.4%. Cash-on-cash: 2.1%.