Rental Property Calculator

The rental property calculator is a more elaborate variation of our cap rate calculator. In short, it's a tool that allows you to analyze any real estate investment to decide whether it will be profitable, but also it can serve you as an investment property calculator or real estate investment calculator.

In this article, we will explain in detail every parameter that can influence your investment and teach you how to calculate the ROI on a rental property.

The first part of the calculator, called the purchase, focuses solely on your initial investment. This is the money that needs to be pumped into your rental property before it will begin to earn a profit. Our real estate investment calculator also gives you the option to take a loan for this purpose. Omni's mortgage calculator will help you decide whether to take a loan if you're in doubt.

• Purchase price — This is the total of all costs you need to bear in order to buy the property. Be sure to include all accompanying expenses, such as the commission.
• Down payment — The money that you put on the table immediately. This money doesn't come from the loan – it is your initial investment.
• Loan amount — The total sum of your loan. You will have to repay this sum plus interest to the bank.
• Loan term — How long will it take to repay the loan? Typical loans are taken out for about 20 years.
• Interest—Quite straightforwardly, this is the interest on the loan determined by the bank. You can estimate it with our interest rate calculator.
• Total paid — The total sum you will return to the bank, both principal payment and interest.

The next section of the investment property calculator deals with the expenses that you have to pay every month. If your costs are annual, you can always change the units of time in the drop-down list.

• Property tax — The tax you have to pay is calculated based on your property's value. It doesn't depend on the rent or the value of the mortgage.
• Insurance — Insurance against the most common occurrences, such as fire, theft, weather damage, and explosions.
• Maintenance — The cost of keeping the property in good shape and all necessary repairs.
• HOA fee — If you are a member of the Homeowners Association (HOA), you have to pay a fee to cover repair and maintenance costs.
• Other costs — All other expenses you need to cover each month or each year.

After assessing the expenses, it is about time to start thinking about your income — after all, this is what you came here for. Your income will generally come from rent. Our rental income calculator has three fields that you should take into account:

• Rent — The gross rental income you will receive from all your tenants each month (probably the most important factor for our rental property roi calculator).
• Vacancy rate — This measures how often the property stays unoccupied, and therefore no rent is collected.
• Management fee — If you don't manage the property yourself but hire someone to do that for you, you will typically need to cover a management fee, depending on the rent.

The next step is to determine your income if you plan to return the property to the market. You need to fill out the following fields of the rental property calculator:

• Value appreciation: typically, each property gains value over time. In this field, you should input the annual percentage increase of this value (our investment property calculator will help you estimate these numbers);
• Holding length: the time after which you will sell this property, measured in years; and
• Selling price: the selling price will be calculated automatically. This is the theoretical price for which you should be able to sell your property. If you know the selling price, input the value directly into this field.

Our rental income calculator automatically generates a summary of all the essential data of your investment. But what do these values actually mean?

• Loan payment: This is the monthly (or annual) payment you need to make to pay off your mortgage;
• Other costs: These are all the other costs, excluding the mortgage;
• Gross income: All the money you receive from your tenants, taking into consideration only the vacancy rate and the management fee;
• Cash flow: The gross income after subtracting the mortgage payment and the maintenance costs. This is the actual amount of money that ends up in your pocket at the end of each period;
• NOI: NOI stands for Net Operational Income. It is equal to the gross income diminished by all the operational costs. The mortgage costs are not taken into consideration here;
• Cash-on-cash return: also called the annual yield, it is the ratio of the amount invested (down payment) and the cash flow. The higher it is, the better; and
• Cap rate: This value describes what part of the property purchase value you will receive in net income annually. It's calculated by dividing the Net Operating Income (NOI) by the property value.

ROI is one of the most critical indicators of a rental property's performance. However, there’s no universal “good” ROI — what’s acceptable can vary depending on factors like location, property condition, financing method, and individual risk tolerance. For example, some investors won’t touch a deal offering less than 10% ROI, while others may be comfortable with 5–8% if the investment is stable, passive, or offers long-term appreciation. Understanding what to aim for is critical to setting realistic goals and evaluating opportunities.

Common benchmarks used in real estate include:

• 5–8% ROI – Reasonable for conservative, low-risk investments;
• 8–12% ROI – Attractive for most mid-level investors;
• 12%+ ROI – Typically considered a strong deal if risk is manageable;
• 1% Rule – Monthly rent should be at least 1% of the purchase price; and
• 50% Rule – Operating expenses estimated at 50% of rental income.

The way you finance a rental property has a direct impact on your ROI. For example, using a mortgage with high interest rates or a small down payment can reduce your annual return, even if the property has solid cash flow. Local market dynamics — like property appreciation trends, seasonal renting — also play a significant role. To evaluate your investment properly, consider adjusting your ROI calculations based on:

• Interest rates and loan terms;
• Down payment amount;
• Local vacancy rates; and
• Property appreciation trends.

Return on investment (ROI) in rental properties shows how much profit you make compared to the money you invested. It helps you see if a property is a sound financial decision.

Cash-on-cash return shows how much profit you make yearly based on your cash investment.

To calculate it:

1. Find your yearly net income (rent minus expenses).
2. Divide it by your total cash investment.
3. Multiply by 100 to get the percentage.

The ROI can be 8%, but it depends. It's 8% if we assume $12,000 in annual net income and a total investment of $150,000, meaning the property generates steady rental income with typical expenses.