Calculator guide
Rental Property Calculator
A real analysis goes beyond rent minus mortgage. This guide walks through how income, expenses, financing, and reserves all factor into the full picture.
What the metric means
A real analysis goes beyond rent minus mortgage. This guide walks through how income, expenses, financing, and reserves all factor into the full picture.
Formula
Where:
- Rent + Other Income
- Gross scheduled income from all sources
- Vacancy
- Estimated lost income from vacancies (typically 5–10% of gross rent)
- Operating Expenses
- Management, maintenance, CapEx reserves, taxes, and insurance
- Monthly Debt Service
- Principal and interest payment on the loan
Example:
- Rent = $2,200/month
- Vacancy (5%) = $110/month
- Effective income = $2,200 − $110 = $2,090
- Operating expenses = $620/month
- Debt service = $1,320/month
- Step 1: Cash Flow = $2,090 − $620 − $1,320
- Step 2: Cash Flow = $150/month
A $150/month cash flow means the property stays in the black under current assumptions, with modest margin for minor cost increases.
How DealPrism uses it
DealPrism treats the rental property calculator as the full decision-support layer, surfacing cash flow, cap rate, cash-on-cash return, DSCR, and downside scenarios under the current assumptions.
Common mistakes
- Comparing only rent and mortgage payment.
- Skipping vacancy, management, maintenance, or CapEx reserves.
- Using listing taxes or rent without validating local comps.
Related FAQs
Analyze your own deal
See this metric in context with your purchase price, rent, expenses, and financing assumptions.
Analyze your own dealDealPrism provides educational analysis based on available data and user assumptions. Results are estimates and may change if rent, taxes, insurance, financing, or other inputs are updated. This content is not financial, legal, tax, or investment advice.