Currency: USD
Enter all amounts in USD. Changing currency keeps numbers unchanged; no exchange rate is applied.
- Monthly cash flow
- $57.85
- Annual net operating income
- $17,760.00
- Capitalization rate
- 5.92%
- Cash-on-cash return
- 0.77%
- Monthly debt service
- $1,422.15
How it works
Separate property performance from financing choices
Hold purchase price, rent, vacancy and operating expenses fixed, then change the down payment. Property operating income and cap rate stay unchanged, while debt service and cash-on-cash return change; leverage affects the investor, not the building’s operations.
Comparing rental cash flow with sale proceeds
Rental income, operating costs, financing, and eventual sale proceeds affect different parts of an investment's return. Review ongoing cash flow separately from the holding-period result. An attractive sale assumption can hide weak annual cash flow, while a positive monthly figure may omit costs not entered. Compare scenarios using consistent vacancy, expense, financing, and holding-period assumptions.
Rental property analysis: formula and assumptions
NOI = effective rental income−operating expenses. Cash flow deducts debt service; cap rate = annual NOI/price.
Operating expenses should include maintenance, insurance, taxes, and management, but exclude mortgage payments and depreciation.
Rental holding period & sale: formula and assumptions
Annual operating cash = collected income − expenses − debt service. Final cash also includes sale proceeds after costs and remaining debt.
Each expense line has its own annual growth. Vacancy applies to rent; management applies to all collected income. Sale equity enters the investor return once, with no assumed income-tax benefits.
Worked example
Reference example currency: USD. These fixed examples do not change with your calculator preferences.
Using the Rental property analysis example:
- Purchase price ($)
- 300000
- Down payment (%)
- 25
- Closing & initial repair costs ($)
- 15000
- Monthly rent ($)
- 2400
- Vacancy allowance (%)
- 5
- Monthly operating expenses ($)
- 800
- Mortgage annual rate (%)
- 6.5
- Mortgage term
- 30
NOI = effective rental income−operating expenses. Cash flow deducts debt service; cap rate = annual NOI/price.
Example result
Monthly cash flow: $57.85
Annual net operating income: $17,760.00
Capitalization rate: 5.92%
Cash-on-cash return: 0.77%
Monthly debt service: $1,422.15
These are illustrative inputs. Change the values to explore a different scenario.
Formula references
References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.
Common questions
Should mortgage payments be included in operating expenses?
No. Operating expenses exclude debt service and depreciation. The model deducts mortgage payments separately when calculating cash flow.
How does a sale affect holding-period return?
Final cash flow includes the sale proceeds after selling costs and remaining mortgage debt. It is counted once in the investor-return stream.
Prepared by Finflo. See our methodology and editorial policy. Read the relevant professional-advice limitations.