Rental property cash flow calculator: will this property pay you, or will you pay it?

By Tom, CPA · Updated October 25, 2026

TL;DR: Enter the price, financing, rent and expenses. The calculator shows the mortgage payment, net operating income, cap rate, cash flow after debt service, and cash-on-cash return. The usual surprise: vacancy, maintenance, capital expenditure reserves and management can eat a third of the rent before the mortgage gets paid.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Every rental looks amazing in the listing photos and in a spreadsheet that assumes 0% vacancy and a roof that lasts forever. Lavish Larry's math: rent minus mortgage equals profit. Frugal Fran's math includes the water heater that will fail on a holiday weekend. This calculator uses Fran's math.

For the big-picture question of whether rentals belong in a FIRE plan at all, see real estate rentals for FIRE and REITs vs rental property.

CPA Warning Label: Cash flow isn't taxable income. Depreciation, principal paydown and passive loss rules change the tax picture, and one bad tenant can wipe out a year of projections.

Inputs

• Price, down payment, rate and term set the loan and the monthly principal-and-interest payment.
• Closing costs and initial repairs count toward cash invested, the denominator of cash-on-cash return.
• Monthly rent: use realistic comparable rents, not the listing's "potential."
• Vacancy: the share of the year the unit is empty or rent goes uncollected.
• Property tax and insurance: annual amounts. Check the post-sale tax, since reassessment can raise it.
• Maintenance, capex and management: each as a percentage of gross rent. Set management to zero if you self-manage, but remember your time isn't free.
• Other monthly costs: HOA dues, owner-paid utilities, lawn care, pest control.

Cash flow

The calculator works top to bottom like a simple income statement:

1. Rent after vacancy = monthly rent × 12 × (1 - vacancy).
2. Operating expenses = property tax + insurance + (maintenance + capex + management) % × annual rent + other costs × 12.
3. Net operating income (NOI) = rent after vacancy - operating expenses. NOI ignores financing.
4. Cash flow = NOI - annual mortgage payments.

Note that the mortgage payment includes principal, which builds equity but still leaves your bank account. Cash flow here is spendable cash, not profit. Run it at a few rent levels to find the break-even rent.

Cap rate vs cash-on-cash

When the cap rate is below your mortgage rate, borrowing generally makes cash flow worse, not better. That's negative leverage. Investors then rely on appreciation, rent growth and principal paydown to justify the deal, which is a bet, not a yield.

Vacancy and capex

Vacancy and capital expenditures are where optimism hides. Capex covers big, irregular replacements: roofs, HVAC, water heaters, appliances, flooring. They don't show up every month, but averaged over the years they're real. Setting them aside as a percentage of rent turns lumpy costs into a monthly reserve.

There's no universal right percentage. It depends on the property's age, condition, local labor costs and tenant turnover. A newer building may need less, while an older one with original systems may need much more. Tax-wise, repairs are generally deductible when paid, while improvements are capitalized and depreciated (IRS Publication 527). See real estate depreciation.

Example

Illustration: A $300,000 single-family rental, 25% down at 7% for 30 years, $9,000 of closing costs, $2,500 a month of rent, 5% vacancy, $4,000 of property tax, $1,500 of insurance, and 8% maintenance, 8% capex and 10% management.

• Mortgage payment: $1,496.93 a month on a $225,000 loan
• Rent after vacancy: $28,500; operating expenses: $13,300; NOI: $15,200
• Cap rate: 5.07%, below the 7% mortgage rate, so leverage is negative
• Cash flow: about -$2,763 a year (-$230 a month); cash-on-cash: -3.29% on $84,000 invested

Paid in cash with no closing costs, the same property throws off $15,200 a year, a 5.07% yield. That's the same as the cap rate, by definition. If Fran self-manages and gets $2,800 of rent, NOI rises to $21,044 and cash flow turns positive, to about $3,081 a year, but she's now doing the job a manager would charge for.

Compare against keeping the down payment in index funds using the expense ratio fee calculator (set fees low), and test the whole plan with the guardrails withdrawal calculator.