🏘️ Rental Income Calculator

NOI = Gross Rental Income - Vacancy Loss - Operating Expenses (NOT including mortgage payments) Operating Expenses include: Property tax, Insurance, Management fee, Maintenance, HOA, Utilities, CapEx reserve NOI is used to calculate Cap Rate and compare properties regardless of financing.

Cap Rate = (Annual NOI / Purchase Price) x 100 Example: NOI $18,000 / Purchase $350,000 = 5.14% A higher cap rate = higher return (but often more risk) Used to compare properties without financing. Good benchmark: 5-8% for most residential markets.

CoC = (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100 Annual Cash Flow = Annual NOI - Annual Mortgage Payments Total Cash Invested = Down Payment + Closing + Rehab Example: Annual Cash Flow: $3,600 Cash Invested: $100,000 CoC = 3,600 / 100,000 = 3.6% CoC measures return on YOUR actual cash invested.

GRM = Purchase Price / Annual Gross Rent Example: $350,000 / ($2,400 x 12) = 12.15 Lower GRM = better deal. Quick screening tool — does not account for expenses. Rule of thumb: GRM under 10 is excellent.

Monthly rent should be at least 1% of purchase price. Example: $350,000 property needs $3,500/month rent. This rule is hard to meet in expensive markets but is a quick initial screening tool. If a property passes the 1% rule, it likely has strong cash flow potential. Most investors use 0.7-0.8% as a more realistic target in today's market.

Operating expenses (excluding mortgage) are roughly 50% of gross rental income. Example: $2,400 rent x 50% = $1,200 expenses Cash flow = $2,400 - $1,200 - Mortgage payment This is a quick estimation rule — actual expenses vary significantly by property age, location and type. Use this calculator for accurate projections.