🏠 Purchase & Financing
💰 Income
📊 Expenses
📈 Deal Analysis Results
✅ Quick Screening Rules
🔮 5-Year & 10-Year Projections
| Year | Property Value | Monthly Rent | Annual Cash Flow | Equity | Total Return | Cumulative ROI |
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🏦 Monthly Amortization Breakdown (First 24 Months)
| Month | Payment | Principal | Interest | Balance |
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Frequently Asked Questions
A good cap rate for rental properties typically ranges from 5% to 10%, depending on the market. In expensive coastal cities, 4-6% may be common and acceptable. In smaller or midwestern markets, investors often target 8-12%. A higher cap rate means a higher potential return relative to the property price, but may also indicate higher risk or a less desirable location. Use cap rate alongside cash-on-cash return and DSCR for a complete picture.
The 1% rule is a quick screening tool: a rental property's monthly rent should be at least 1% of the total purchase price (including rehab). For example, a $200,000 property should rent for at least $2,000/month. The more aggressive 2% rule requires $4,000/month on that same property. These are rough guidelines for initial screening only — always run a full cash flow analysis before making an offer.
Budget 5-10% of gross rent for routine maintenance and repairs (leaky faucets, appliance fixes, minor plumbing). Add another 5-8% of rent for capital expenditure reserves (roof, HVAC, water heater, flooring). Older properties and those with deferred maintenance typically need higher reserves. A common rule of thumb is $1 per square foot per year for maintenance on average.
Cash-on-cash return (CoC) measures the annual pre-tax cash flow as a percentage of your total cash invested. Formula: Annual Cash Flow ÷ Total Cash Invested × 100. Most investors target 8-12% CoC return. Unlike cap rate, CoC accounts for your financing terms. It does not include equity buildup or appreciation, so your total return will typically be higher.
Step 1: Estimate gross income (rent + other income). Step 2: Subtract vacancy loss. Step 3: Calculate all operating expenses (taxes, insurance, management, maintenance, CapEx, HOA, utilities). Step 4: Subtract expenses from income to get NOI. Step 5: Subtract mortgage payment from NOI to get cash flow. Step 6: Calculate metrics like cap rate, CoC return, DSCR, and GRM. Step 7: Apply screening rules. Step 8: Project returns over 5-10 years with appreciation.
