Real Estate

Rental Property Calculator

Analyze cash flow, cap rate, cash-on-cash return, and total ROI for any rental property investment.

Quick Answer:In 2026, a well-performing rental property typically generates a cash-on-cash return of 6–10% and a cap rate of 5–8%. For a $300,000 property with 25% down, $2,000/month rent, and 45% operating expenses, monthly cash flow is approximately $200–$400 after mortgage payments at 7% interest.

Property & Financing

Monthly Cash Flow

Calculating... net after all expenses

Cap Rate

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Cash-on-Cash Return

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Annual Cash Flow

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Total Cash Invested

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Visual Comparison

Gross Rental Income—
Mortgage Payment—
Operating Expenses—
Net Cash Flow—

Expert Insight 2026 Pro Tip

Rental investment strategy for 2026: With mortgage rates near 7%, focus on properties where the 1% rule applies — monthly rent should be at least 1% of purchase price ($2,000/month for a $200,000 property). In today's market, this is achievable primarily in Midwest and Southeast markets like Memphis, Indianapolis, and Birmingham. Consider house hacking (living in one unit of a multi-family) to qualify for lower owner-occupied rates of 6.5% vs 7%+ for investment properties, dramatically improving cash flow.

Rental Property Investment Guide & FAQ

How do you calculate cash flow on a rental property?

Monthly Cash Flow = Effective Rental Income - Mortgage Payment - Operating Expenses. Effective rental income accounts for vacancy: Gross Rent × (1 - Vacancy Rate). Operating expenses include property management (8-12% of rent), maintenance/repairs (1-2% of property value/year), insurance (~$100-150/month), property taxes (varies by location), and reserves for capital expenditures (5-10% of rent). Example: $300,000 property, 25% down ($75,000), 7% rate, 30yr. Loan amount $225,000, monthly mortgage ~$1,497. Rent $2,000, 5% vacancy = $1,900 effective. Expenses $500/month. Cash flow = $1,900 - $1,497 - $500 = -$97 (negative!). This shows why running numbers carefully matters — many properties don't cash flow at 2026 interest rates without significant down payment.

What is cash-on-cash return and why does it matter?

Cash-on-Cash Return = Annual Pre-Tax Cash Flow / Total Cash Invested × 100. Total cash invested includes down payment plus closing costs. Unlike cap rate (which ignores financing), CoC return measures your actual return on the cash you put in. Example: $75,000 down + $6,000 closing = $81,000 invested. If annual cash flow is $6,000, CoC = 7.4%. A good CoC return in 2026 is 6-10%. CoC can exceed cap rate when you use leverage effectively (positive leverage = mortgage rate below cap rate). In 2026 with 7% rates, positive leverage requires cap rates above 7%, which narrows the market. Many investors accept lower CoC returns (4-6%) for appreciation potential in growing markets.

Should I invest in rental property in 2026 with high interest rates?

High rates create both challenges and opportunities. Challenges: higher mortgage payments reduce cash flow, higher qualifying requirements, fewer competing buyers (which can mean lower prices). Opportunities: less competition means better negotiating power, price reductions of 5-15% from 2022 peaks in many markets, and you can "marry the house, date the rate" — refinance when rates drop. Total return on rental property includes: cash flow, appreciation (historically 3-5%/year), principal paydown (tenant pays your mortgage), and tax benefits (depreciation, mortgage interest deduction). Even with zero cash flow, a $300,000 property appreciating 4% earns $12,000/year in equity. Combined with ~$3,000 in annual principal paydown, total return can be strong despite negative cash flow.

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