Real Estate Investment Calculator

This calculator helps you analyze potential real estate investments by calculating key metrics that investors use to evaluate properties.

Key Metrics Explained

Cash Flow

Monthly cash flow is the difference between your rental income and total expenses. Positive cash flow means the property is generating more income than it costs to operate.

• Positive cash flow: Property is profitable
• Negative cash flow: Property is losing money
• Break-even: Income equals expenses

Cap Rate

The capitalization rate (cap rate) measures the property's annual net operating income relative to its market value. It helps compare different properties regardless of financing.

• Below 4%: Conservative return, typically in prime locations
• 4-6%: Moderate return, common in stable markets
• Above 6%: Higher return, often in emerging markets

Cash on Cash Return

Cash on cash return measures the annual cash flow relative to the total cash invested. It shows how efficiently your invested capital is generating returns.

• Below 6%: Low return relative to risk
• 6-8%: Average return
• 8-12%: Good return
• Above 12%: Excellent return

Operating Expenses

Common operating expenses to consider when analyzing a rental property:

• Property taxes
• Insurance
• Utilities
• Maintenance and repairs
• Property management fees
• HOA fees (if applicable)
• Vacancy reserves

Investment Considerations

• Location and market trends
• Property condition and age
• Tenant quality and rental demand
• Future appreciation potential
• Exit strategy options
• Tax benefits and implications