166 Rental Property Calculations
Every metric you need to analyze a rental property investment, from basic income to complex multi-year projections.
Income Metrics
Revenue, cash flow, and income metrics that show how much money a property generates.
Gross Potential Rent
Total annual rental income assuming full occupancy.
Effective Gross Income
Actual expected income after vacancy and other income.
Net Operating Income
Income remaining after all operating expenses but before debt service.
Cash Flow Before Tax
Cash remaining after operating expenses and debt service.
Cash Flow After Tax
Cash remaining after all expenses, debt service, and estimated taxes.
Revenue Per Unit
Effective gross income divided by the number of units.
Income Per Square Foot
Effective gross income divided by total square footage.
Rent to Value Ratio
Monthly rent as a percentage of purchase price.
Gross Rent Multiplier
Purchase price divided by annual gross rent.
Monthly Cash Flow Per Unit
Monthly pre-tax cash flow divided by number of units.
True Cash Flow™
Cash flow before tax plus the cash benefit of depreciation tax savings.
Other Income
Monthly income from sources other than rent (parking, laundry, storage, etc.).
Monthly Rent
The gross monthly rental income collected from tenants.
Return Metrics
Return on investment metrics that measure the profitability of your investment.
Cap Rate
Net operating income as a percentage of property value.
Cash on Cash Return
Annual cash flow divided by total cash invested.
Total ROI (Year 1)
Combined return from cash flow, appreciation, loan paydown, and Cash Flow from Depreciation™ in Year 1.
Cash Flow Return on Equity
Annual cash flow as a percentage of current equity.
Appreciation Return on Equity
Annual appreciation as a percentage of current equity.
Debt Pay Down Return on Equity
Annual principal paydown as a percentage of current equity.
Gross Depreciation Return on Equity
Annual depreciation deduction as a percentage of current equity.
Cash Flow from Depreciation™ Return on Equity
Tax savings from depreciation as a percentage of current equity.
True Cash on Cash ROI
True Cash Flow™ as a percentage of total cash invested.
Annualized Return (5-Year)
Compound annual growth rate over a 5-year hold period.
IRR (5-Year)
Internal rate of return accounting for timing of all cash flows over 5 years.
Net Income Return
After-tax cash flow as a percentage of total cash invested.
Yield on Cost
NOI divided by total all-in cost including closing and rehab.
Operating Yield
NOI as a percentage of purchase price.
Unlevered Yield
NOI as a percentage of current property value (same as cap rate).
Return Per Dollar (5-Year)
Total distributions over 5 years divided by initial cash invested.
Equity Multiple (5-Year)
Total distributions over 5 years as a multiple of equity invested.
Expense Metrics
Operating cost metrics that track how much it costs to own and maintain a property.
Operating Expense Ratio
Operating expenses as a percentage of effective gross income.
Total Monthly Expenses
All monthly costs including operating expenses and mortgage payment.
Total Annual Expenses
All annual costs including operating expenses and debt service.
Per Unit Operating Cost
Annual operating expenses divided by number of units.
Operating Cost Per Square Foot
Annual operating expenses divided by total square footage.
Total Expense Per Unit Per Year
Total annual expenses (including debt service) per unit.
Management Cost Annual
Annual property management cost.
Maintenance Cost Annual
Annual maintenance and repair reserve.
CapEx Reserve Annual
Annual capital expenditure reserve for major replacements.
Insurance Cost Per Unit
Annual insurance cost divided by number of units.
Tax Cost Per Unit
Annual property taxes divided by number of units.
Vacancy Loss Annual
Annual income lost to vacancy.
Effective Vacancy Rate
Actual vacancy loss as a percentage of gross potential rent.
One Month of Reserves
Monthly amount needed for one month of operating expenses, debt service, and PMI.
+R6 Months of Reserves
Number of months in the conservative reserve scenario (6 months).
6-Month Reserves
Six months of operating reserves: enough to cover expenses, debt service, and PMI for half a year.
+R6 Rate of Return
Expected annual return on a 6-month reserve fund (1% — savings account).
+R6 Return in Dollars
Annual dollar return earned on a 6-month reserve fund at 1%.
+R12 Months of Reserves
Number of months in the aggressive reserve scenario (12 months).
+R12 Rate of Return
Expected annual return on a 12-month reserve fund (8% — invested).
+R12 Return in Dollars
Annual dollar return earned on a 12-month reserve fund at 8%.
+R6 Reserves + Total Invested
Total capital deployed including both the property investment and 6-month reserves.
HOA Fees
Annual Homeowners Association fees for the property.
Monthly Utilities
Monthly utility costs paid by the landlord (water, sewer, trash, gas, electric).
Other Monthly Expenses
Combined additional monthly expenses not covered by standard categories.
Vacancy Rate
The estimated percentage of time the property will be vacant each year.
Property Tax Rate
The annual property tax rate as a percentage of property value.
Property Insurance Rate
The annual property insurance cost as a percentage of property value.
Property Management Rate
The property management fee as a percentage of gross rent.
Maintenance Rate
The annual maintenance budget as a percentage of gross rent.
Monthly CapEx Reserve
Monthly capital expenditure reserve for major replacements.
Debt Metrics
Loan and mortgage metrics that analyze your financing structure and obligations.
Monthly Mortgage Payment
Monthly principal and interest payment on the mortgage.
Annual Debt Service
Total annual mortgage payments.
Debt Service Coverage Ratio
NOI divided by annual debt service — measures ability to cover mortgage.
Loan to Value Ratio
Loan amount as a percentage of property value.
Debt Yield
NOI as a percentage of total loan amount.
Monthly Principal Payment
Principal portion of the first month's mortgage payment.
Monthly Interest Payment
Interest portion of the first month's mortgage payment.
Year 1 Principal Paydown
Total principal paid down during the first year.
Year 1-5 Cumulative Principal Paydown
Cumulative principal paid down over the first 5 years.
Total Interest Over Life of Loan
Total interest paid if the loan is held to maturity.
Remaining Balance Year 5
Loan balance remaining after 5 years of payments.
Remaining Balance Year 10
Loan balance remaining after 10 years of payments.
Equity From Paydown Year 1
Equity gained from mortgage principal payments in Year 1.
Breakeven Ratio
Percentage of gross rent needed to cover all expenses and debt service.
Front End Ratio
Monthly mortgage payment as a percentage of monthly rent.
Back End Ratio
Monthly mortgage plus operating expenses as a percentage of rent.
Loan Amount
The total amount borrowed to finance the property purchase.
Monthly PMI
Monthly Private Mortgage Insurance payment required when down payment is below 20%.
Total Monthly Payment
Combined monthly mortgage principal, interest, and PMI payment.
Mortgage Interest Rate
The annual interest rate on the mortgage loan.
Loan Term
The total length of the mortgage loan in months.
Down Payment Percent
The down payment as a percentage of the purchase price.
Closing Costs Percent
Purchase closing costs as a percentage of the purchase price.
PMI Rate
Annual Private Mortgage Insurance rate as a percentage of the loan amount.
Valuation Metrics
Property value estimates using income, cost, and market comparison approaches.
Price Per Unit
Purchase price divided by number of units.
Price Per Square Foot
Purchase price divided by total square footage.
Value Based on Cap Rate
Property value estimated by dividing NOI by the cap rate.
Value Based on GRM
Property value estimated using the gross rent multiplier.
Cost Approach Value
Estimated value based on land value plus depreciated replacement cost.
Equity Position Current
Current property value minus outstanding loan balance.
Equity as Percent of Value
Current equity as a percentage of property value.
Appreciation to Double Equity
Appreciation rate needed to double your current equity.
Market Value to Rent Ratio
Property value divided by annual rent — inverse of rent to value ratio.
Replacement Cost Estimate
Estimated cost to rebuild the structure at current construction costs.
Property Value
The current estimated market value of the property.
Square Footage
The total livable square footage of the property.
Number of Units
The number of rentable units in the property.
After-Repair Value (ARV)
The estimated property value after all planned renovations are completed.
Cash Flow Projections
Multi-year cash flow and NOI projections with growth assumptions.
Other Income Appreciation Rate
Annual growth rate for other income sources like parking, laundry, or storage.
HOA Appreciation Rate
Annual growth rate for HOA dues.
Utilities Appreciation Rate
Annual growth rate for utility costs.
CapEx Appreciation Rate
Annual growth rate for capital expenditure reserves.
Other Expense 1 Appreciation Rate
Annual growth rate for the first custom expense category.
Other Expense 2 Appreciation Rate
Annual growth rate for the second custom expense category.
Projected Cash Flow (Year 1-5)
Year-by-year cash flow projection for 5 years with growth assumptions.
Projected NOI (Year 1-5)
Year-by-year NOI projection for 5 years.
Cumulative Cash Flow Year 5
Total cash flow collected over the first 5 years.
Months Until Cash Flow Positive
Number of months before the property generates positive monthly cash flow.
Cash Flow Growth Rate
Percentage change in cash flow from Year 1 to Year 2.
Break-Even Occupancy Rate
Minimum occupancy rate needed to cover all expenses and debt service.
Appreciation Rate
The expected annual property value appreciation rate.
Rent Appreciation Rate
The expected annual rent growth rate.
Tax Benefits
Depreciation, tax savings, and after-tax return calculations.
Annual Depreciation
Annual straight-line depreciation deduction for the building.
Monthly Depreciation
Monthly depreciation deduction.
Depreciation as Percent of Income
Annual depreciation as a percentage of effective gross income.
Tax Savings From Depreciation
Dollar amount saved in taxes due to depreciation deduction.
Cash Flow from Depreciation™
Additional effective cash flow generated by depreciation tax savings.
Effective Tax Rate
Estimated income tax as a percentage of NOI.
Depreciation Remaining
Years of depreciation benefit remaining.
Cost Basis
Total cost basis for tax purposes (purchase + closing + improvements).
Accumulated Depreciation Year 5
Total depreciation claimed over 5 years.
Income Tax Rate
Your marginal income tax rate applied to rental income.
Capital Gains Tax Rate
The tax rate applied to long-term capital gains when selling the property.
Depreciation Recapture Tax Rate
The tax rate on accumulated depreciation when the property is sold.
Land Value Percent
The percentage of property value attributed to the land (non-depreciable).
Equity & Wealth
Wealth building metrics tracking equity growth from appreciation and paydown.
Capital Gain (Year 1)
Dollar amount of property appreciation in the first year.
True Net Equity™
Equity remaining after accounting for the cost to access it through refinancing.
Max LTV for Cash-Out Refi
Maximum loan-to-value ratio allowed for a cash-out refinance (industry standard 75%).
Cash-Out Refi Equity
Maximum cash you can pull out through a cash-out refinance.
Cost to Cash-Out Refi (%)
Estimated percentage cost to execute a cash-out refinance (industry standard 8%).
Cost to Cash-Out Refi ($)
Estimated dollar cost to execute a cash-out refinance.
Cost to Access Equity
Total estimated cost to convert paper equity into usable cash.
Total Equity Current
Current equity position (property value minus loan balance).
Equity From Appreciation (Year 1-5)
Cumulative equity gained from property value appreciation over 5 years.
Equity From Loan Paydown (Year 1-5)
Cumulative equity built from mortgage principal payments over 5 years.
Total Wealth Building Year 1
Combined cash flow, appreciation, and principal paydown in Year 1.
Total Wealth Building Year 5
Cumulative wealth created from all sources over 5 years.
Net Worth Impact Year 1
Total impact on your net worth from this property in Year 1.
Leverage Ratio
Property value divided by equity — measures leverage amplification.
Equity Growth Rate
Year-over-year percentage growth in equity position.
Deal Analysis
Deal screening tools and acquisition analysis metrics.
Total Cash to Close
Cash needed at the closing table to acquire the property.
Total Cash Invested
Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.
All-In Cost Per Unit
Total acquisition cost (including closing and rehab) per unit.
All-In Cost Per Square Foot
Total acquisition cost per square foot.
Rehab Cost Per Square Foot
Rent-ready/renovation costs divided by square footage.
ARV Estimate
After Repair Value — estimated property value after renovations.
Profit If Sold Today
Net profit if the property were sold at current market value.
Profit If Sold Year 5
Net profit if sold after 5 years, after all costs and taxes.
Return If Sold Year 5
Net sale profit as a percentage of initial cash invested.
One Percent Rule
Does monthly rent equal or exceed 1% of purchase price?
Two Percent Rule
Does monthly rent equal or exceed 2% of purchase price?
Fifty Percent Rule Estimate
Estimated annual cash flow assuming 50% of rent goes to expenses.
Purchase Price
The agreed-upon price to acquire the property.
Down Payment
The cash portion you pay upfront toward the purchase price.
Closing Costs
Fees and expenses paid at the time of purchase beyond the down payment.
Seller Concessions
Credits from the seller that reduce your out-of-pocket closing costs.
Rent Ready Costs
Initial repairs and improvements needed before renting the property.
Real Estate Commission
The agent commission rate paid when selling the property.
Closing Costs at Sale
Transaction costs when selling the property as a percentage of sale price.
Comparison Metrics
Metrics comparing real estate returns to stocks, bonds, and other investments.
Equivalent Stock Return
Total Year 1 ROI comparable to stock market annual returns.
Equivalent Bond Yield
Cash-on-cash return comparable to bond yields.
Equivalent Savings Yield
Cash return comparable to savings account interest rates.
Return vs S&P 500
Your total ROI minus the historical 10% S&P 500 average.
Income Per Hour of Management
Annual cash flow divided by annual management hours.
Monthly Management Hours
The estimated hours per month spent managing the property.