Investment Property Calculator
Analyze purchase price, financing, rental income, and expenses to evaluate your investment property's full financial picture.
AProperty & Purchase
BRental Income
CFinancing & Expenses
How to Use
- 1Enter your property purchase price, down payment percentage, and closing costs.
- 2Fill in rental income details including vacancy rate and any other income sources.
- 3Enter all financing and expense details including mortgage rate, taxes, insurance, HOA, maintenance, management fee, and CapEx reserve.
- 4Click Calculate to see your full investment analysis including cash flow, cap rate, ROI, DSCR, and 10-year projection.
Example Calculation
Purchase Price: $400,000 | Down Payment: 25% ($100,000)
Closing Costs: $8,000 | Appreciation Rate: 3%
Monthly Rent: $3,000 | Rent Increase: 2% | Vacancy: 5%
Other Income: $0 | Rate: 7.0% | Term: 30 years
Tax: $5,000/yr | Insurance: $1,500/yr | HOA: $0
Maintenance: $200/mo | Management: 8% | CapEx: $2,400/yr
This example uses default values. Increasing rent or reducing expenses improves cash flow and investment rating.
Frequently Asked Questions
Q1: What inputs does this calculator use?
A1: This calculator uses 16 inputs across three categories: property details (purchase price, down payment, closing costs, appreciation), rental income (monthly rent, rent increase, vacancy rate, other income), and financing and expenses (mortgage rate, loan term, property tax, insurance, HOA, maintenance, management fee, and CapEx reserve). Together these give a complete picture of your investment.
Q2: What is DSCR and why does it matter?
A2: Debt Service Coverage Ratio (DSCR) measures whether your rental income covers your mortgage payments. A DSCR of 1.25 or higher is typically required by lenders for investment property loans. A DSCR below 1.0 means the property does not generate enough income to cover its debt — a high-risk signal for both investors and lenders.
Q3: What is the difference between Cap Rate and Cash on Cash Return?
A3: Cap Rate measures a property's income potential independent of financing — it compares Net Operating Income to the purchase price. Cash on Cash Return measures the actual cash earned relative to the cash you personally invested (down payment + closing costs). A property can have a healthy cap rate but negative cash on cash if mortgage payments are high.
Q4: What is CapEx Reserve and how much should I budget?
A4: Capital Expenditure (CapEx) reserve is money set aside for major repairs such as roof replacement, HVAC systems, plumbing, and appliances. A common rule of thumb is to budget 1% of the property value per year — for a $400,000 property that is $4,000/year. This calculator defaults to $2,400/year as a conservative starting estimate.
Q5: How is the 10-year projection calculated?
A5: Each year the projected monthly rent increases by your specified Annual Rent Increase percentage. Annual income is calculated from projected rent adjusted for vacancy rate. Non-mortgage expenses (tax, insurance, maintenance, management, CapEx) increase by 2% per year to account for inflation. The mortgage payment stays fixed. Equity is estimated as your down payment plus 4% of the loan amount per year as a simplified principal paydown estimate.
This calculator provides estimates for informational purposes only. Actual investment performance may vary based on market conditions, actual expenses, and tax implications. Consult a licensed financial advisor before making real estate investments.