Real Estate Investment Calculator
Analyze rental property investments with detailed cash flow analysis, cap rates, ROI calculations, and long-term financial projections to make informed real estate decisions.
Investment Property Details
Investment Analysis
Enter your property details to analyze investment potential and calculate returns.
How to Use the Real Estate Calculator
- Enter Purchase Details: Input property price, down payment, interest rate, and loan term
- Add Monthly Expenses: Include property tax, insurance, PMI, HOA fees, and maintenance costs
- Set Rental Income: Enter expected monthly rent and vacancy rate for the area
- Configure Analysis: Set property management fees, appreciation rate, and holding period
- Review Results: Analyze cash flow, cap rate, cash-on-cash return, and long-term projections
- Compare Scenarios: Adjust inputs to compare different properties or investment strategies
Understanding Real Estate Investment Metrics
Key Performance Indicators
Cash Flow
Monthly rental income minus all expenses. Positive cash flow means the property generates income after all costs.
Cap Rate (Capitalization Rate)
Annual rental income divided by property value. Shows the return if you paid cash for the property.
Cash-on-Cash Return
Annual cash flow divided by initial cash invested. Measures return on your actual investment.
Investment Benchmarks
Good Cap Rates
Generally 5-10% depending on location and property type. Higher cap rates may indicate higher risk or less desirable areas.
Positive Cash Flow
Aim for properties that generate positive monthly cash flow to avoid paying out of pocket for expenses.
1% Rule
Monthly rent should be at least 1% of purchase price. This is a quick screening tool for potential investments.
Real Estate Investment Tips
Before You Buy
Managing Your Investment
Frequently Asked Questions
What is a good cap rate for rental property?
Cap rates typically range from 4-10% depending on location and property type. Urban areas often have lower cap rates (4-6%) but better appreciation, while rural areas may have higher cap rates (8-10%) but slower appreciation.
How much should I budget for maintenance and repairs?
A common rule is to budget 1-2% of the property value annually for maintenance and repairs. Older properties may require closer to 2-3%, while newer properties might need only 1%.
What vacancy rate should I use in my calculations?
Vacancy rates vary by market, but 5-10% is common. Research local market conditions - areas with high demand might see 3-5% vacancy, while markets with oversupply could experience 10-15% or higher.
Should I use a property management company?
Property management companies typically charge 8-12% of rental income but handle tenant screening, rent collection, and maintenance coordination. Consider this if you lack time, live far from the property, or own multiple units.
How do I estimate property appreciation?
Historical data shows average annual appreciation of 3-4% nationally, but this varies significantly by location. Research local market trends, economic growth, and development plans to estimate future appreciation more accurately.