Rental Property Calculator

Purchase
Purchase Price 
Down Payment 
Interest Rate 
Loan TermYears
Other One-time Cost 
 
Recurring Costs
 AnnualAnnual
Increase
Property Tax
Insurance
HOA Fee
Maintenance
Other Costs
    
Income
 Annual
Increase
Monthly Rent 
Vacancy Rate 
Management Fee 
 
Sell
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Value Appreciation
Per Year
Sell Price
 
Holding LengthYears
Sell Cost%

 

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Rental property investment mostly refers to real estate investment that involves the purchase, holding, leasing, and sale. Many of the time, for better return, investors purchase cheap and inferior properties, such as foreclose properties. Then, they improve them before leasing out. Rental property investments are normally capital intensive, highly cash flow dependent, and have low liquidity. However, compared with equity market, rental property investment are normally more stable, has some tax benefit, and inflation hedged. Internal rate of return (IRR), capitalization rate, and cash flow are the most important indicators for comparing and picking different rental property investments.

Internal rate of return (IRR), also called economic rate of return (ERR), is the real annual return of the property based on the amount invested and the cash flow later. The higher the IRR, the more desirable it is to make the investment.

Capitalization rate is the ratio of net operating income (NOI) to the investment asset value. It is an indicator for quick investment property comparison.

Cash flow is the pure money flow of an investment. When purchasing rental property with loan, cash flow needs to be examined carefully. Many rental property investment failures are caused by unsustainable negative cash flow.