This property is projected to cash flow positively by 123.86/month after all expenses, including the mortgage payment.
Notes
A 6.66% cap rate is one way to compare this property against others — commonly-cited healthy ranges vary a lot by market (often 4-10%), so weigh it against comparable properties in the same area rather than a single universal number.
Recommendations
Compare the down payment and monthly payment against buying with a standard mortgage instead of an investment loan using the Mortgage Calculator.
If you already own another home, see how much equity you could borrow against instead of a fresh down payment with the Home Equity / HELOC Calculator.
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Disclaimer
This calculator provides estimates for informational purposes only and does not constitute financial, medical, legal, or tax advice. Always consult a qualified professional about your specific situation.
How This Calculator Works
A rental property’s cash flow is what’s left of the rent after every expense — including the
mortgage — is paid. Enter the purchase price, financing terms, expected rent, and operating
expenses, and this calculator shows the monthly cash flow along with the cap rate and cash-on-cash
return, two standard metrics investors use to compare properties.
Net Operating Income (NOI) = Annual Rent−Annual Operating Expenses,
deliberately excluding the mortgage payment — NOI describes the property itself, independent of
how it’s financed.
Cap rate = NOI÷Purchase Price — a quick way to compare
properties regardless of financing, though what counts as a “good” cap rate varies
significantly by market.
Cash-on-cash return = Annual Cash Flow÷Total Cash Invested
(down payment + closing costs) — the return on the investor’s own money, as opposed to the
property’s total value.
Worked Example
A $250,000 property, 20% down, a 6.5% 30-year mortgage, renting for
$2,200/month, with $3,000/year property tax, $1,200/year insurance,
8% maintenance, 5% vacancy, 8% management, and $5,000 closing costs:
Monthly mortgage payment (on the $200,000 loan): $1,264.14.
Monthly cash flow: 2,200−2,076.14=123.86 — this property is projected to cash
flow positively at these assumptions.
Annual NOI: $16,656, for a cap rate of 16,656÷250,000=6.66%.
Cash-on-cash return: 2.70% on the $55,000 actually invested.
Cómo funciona esta calculadora
El flujo de efectivo de una propiedad de alquiler es lo que queda de la renta después de pagar
todos los gastos — incluida la hipoteca. Ingresa el precio de compra, los términos de
financiamiento, la renta esperada y los gastos operativos, y esta calculadora muestra el flujo de
efectivo mensual junto con la tasa de capitalización y el retorno sobre efectivo invertido, dos
métricas estándar que los inversionistas usan para comparar propiedades.
La fórmula
Flujo de efectivo mensual =
Renta mensual−Costos mensuales totales (pago de hipoteca + impuesto
predial + seguro + cuota de HOA + mantenimiento + provisión por vacancia + cuota de
administración).
Ingreso Operativo Neto (NOI) = Renta anual−Gastos operativos anuales, excluyendo deliberadamente el pago de la hipoteca — el NOI describe la propiedad en
sí misma, independientemente de cómo se financia.
Tasa de capitalización = NOI÷Precio de compra — una forma rápida
de comparar propiedades sin importar el financiamiento, aunque lo que cuenta como una “buena”
tasa de capitalización varía significativamente según el mercado.
Retorno sobre efectivo invertido = Flujo de efectivo anual÷Efectivo total invertido (pago inicial + costos de cierre) — el retorno sobre el propio dinero del
inversionista, a diferencia del valor total de la propiedad.
Ejemplo resuelto
Una propiedad de $250,000, con 20% de pago inicial, una hipoteca a 6.5% a 30
años, que se renta en $2,200/mes, con $3,000/año de impuesto predial,
$1,200/año de seguro, 8% de mantenimiento, 5% de vacancia, 8% de administración, y
$5,000 en costos de cierre:
Pago mensual de hipoteca (sobre el préstamo de $200,000): $1,264.14.
There's no single universal answer — cap rates commonly cited as healthy (often 4-10%) vary a lot by market, property type, and risk tolerance. Compare a property's cap rate against similar properties in the same area rather than a fixed target.
Why doesn't Net Operating Income (NOI) include the mortgage payment?
NOI is meant to describe the property's own performance independent of how it's financed — the same property has the same NOI whether bought entirely in cash or with a large mortgage. Cap rate (NOI divided by price) is comparable across properties for exactly this reason.
What is cash-on-cash return, and how is it different from cap rate?
Cap rate measures return relative to the property's total price. Cash-on-cash return measures return relative to just the actual cash you put in (down payment plus closing costs) — it accounts for financing, so a highly-leveraged purchase can show a very different cash-on-cash return than its cap rate would suggest.
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