Real Estate ROI Calculator
Calculate cash flow, NOI, cap rate, cash-on-cash return and DSCR for a rental property.
Loan Amount ($)
Monthly Mortgage Payment ($)
Monthly Operating Expenses ($)
Monthly Net Cash Flow ($)
Annual Net Cash Flow ($)
Net Operating Income (NOI) ($)
Cap Rate (%)
Cash on Cash Return (%)
DSCR (x)
Real estate ROI calculator: what it does
This real estate ROI calculator turns a rental property's purchase, financing and income figures into the metrics investors actually use: monthly & annual net cash flow, Net Operating Income (NOI), cap rate, cash-on-cash return, and DSCR. Enter your numbers to see whether a deal cash-flows and how it compares to common benchmarks. It is an educational tool, not financial advice.
The key metrics, defined
Cash flow is the money left each month after collecting rent and paying operating expenses and the mortgage. Net Operating Income (NOI) is annual rental income (after vacancy) minus operating expenses, but before the mortgage. Cap rate is NOI divided by purchase price — a financing-independent measure of the property's yield. Cash-on-cash return is annual pre-tax cash flow divided by the cash you actually invested (mainly the down payment), so it reflects your leveraged return. DSCR (Debt Service Coverage Ratio) is NOI divided by the annual mortgage payment — how comfortably income covers the loan.
The formulas
How to use the calculator
- Enter the purchase price and down payment (the rest becomes the loan).
- Add the interest rate and loan term for the mortgage payment.
- Enter monthly rent and a realistic vacancy rate.
- Add operating costs: base monthly expenses, property tax, insurance and maintenance.
- Click Calculate ROI to see all nine metrics, then export or copy them.
Worked example
Inputs: purchase $250,000; down payment $50,000; rate 4.5%; term 30 years; rent $2,100/mo; base expenses $200/mo; property tax $3,000/yr; insurance $1,200/yr; maintenance $1,000/yr; vacancy 5%.
Results: Loan = $200,000. Monthly mortgage = $1,013.37. Monthly OpEx = $200 + ($5,200 ÷ 12) = $633.33. Monthly net rent = $2,100 − 5% = $1,995. Monthly net cash flow = 1,995 − 633.33 − 1,013.37 = $348.30 → annual $4,179.56. NOI = (1,995 − 633.33) × 12 = $16,340. Cap rate = 16,340 ÷ 250,000 = 6.54%. Cash-on-cash = 4,179.56 ÷ 50,000 = 8.36%. DSCR = 16,340 ÷ 12,160.44 = 1.34 — a healthy, financeable deal.
What counts as a "good" number?
Benchmarks are rules of thumb and vary by market, property type and risk. Treat them as a starting point, not a guarantee.
| Metric | Rough benchmark (2025–2026) | What it tells you |
|---|---|---|
| Cap rate | ~5–10% residential; ~4.5–6.5% institutional multifamily | Property yield, ignoring financing. Higher can mean higher return or higher risk. |
| Cash-on-cash return | Many investors target ~8%+ | Return on the actual cash you invested, after the mortgage. |
| DSCR | Lenders usually want ≥ 1.20–1.25 | Safety margin of income over the loan payment. |
| Monthly cash flow | Positive (the more, the safer) | Whether the property pays for itself each month. |
| 1% rule (screen) | Monthly rent ≥ 1% of price | Quick filter before a full analysis. |
Limitations & disclaimer
This calculator estimates common return metrics from the inputs you provide. It does not include income taxes, depreciation, appreciation, closing costs, capital expenditures (roof, HVAC), loan points, or PMI, and it assumes a fixed-rate loan. Real returns depend on local market conditions, tenant quality and financing details. This is an educational tool, not financial, investment, tax or legal advice — consult a qualified professional before making an investment decision.
Frequently asked questions
What is a good ROI on a rental property?
It depends on the metric and market. Many investors look for a cash-on-cash return around 8%+, a cap rate roughly 5–10% for residential rentals (about 4.5–6.5% for institutional multifamily in 2025–2026), and positive monthly cash flow. Higher returns usually carry higher risk.
Cap rate vs cash-on-cash return vs ROI — what's the difference?
Cap rate = NOI ÷ purchase price (ignores financing). Cash-on-cash = annual cash flow ÷ cash invested (reflects your leverage). ROI is broader total return and can also include appreciation and loan paydown.
What is DSCR and why do lenders want 1.25?
DSCR = NOI ÷ annual mortgage payment. 1.0 means income exactly covers the loan; most lenders want ≥ 1.20–1.25 for a safety margin, and a higher DSCR can earn better terms.
Does cap rate include the mortgage?
No. Cap rate uses NOI, which excludes mortgage principal and interest, so you can compare properties regardless of financing. Cash-on-cash return is the metric that accounts for your mortgage.
What expenses are included in NOI?
Operating costs — property tax, insurance, maintenance, management and similar — subtracted from rent after vacancy. NOI excludes the mortgage payment, income taxes, depreciation and one-time capital expenditures.
What is the 1% rule?
A quick screen: monthly rent should be at least 1% of the purchase price (e.g. $2,500/mo on a $250,000 home). It's a rough filter, not a full analysis.
How does vacancy affect returns?
Vacancy lowers effective rental income. A 5% vacancy rate means you collect ~95% of gross rent on average, reducing cash flow, NOI, cap rate and cash-on-cash return. A realistic vacancy assumption keeps projections honest.
Is this calculator financial advice?
No. It's an educational estimate from the numbers you enter and does not account for taxes, appreciation or your specific situation. Consult a qualified professional before investing.
References
- Investopedia — Capitalization (Cap) Rate, Cash-on-Cash Return, and Debt Service Coverage Ratio.
- U.S. Consumer Financial Protection Bureau — mortgage and loan basics.
Creator
Shakeel Muzaffar is the Founder and Editor-in-Chief of MultiCalculators.com, bringing over 15 years of experience in digital publishing, product strategy, and online tool development. He leads the platform's editorial vision, ensuring every calculator meets strict standards for accuracy, usability, and real-world value. Shakeel personally oversees content quality, formula verification workflows, and the platform's commitment to publishing tools that are genuinely useful for students, professionals, and everyday users worldwide.
Areas of Expertise: Editorial Leadership, Digital Publishing, Product Strategy, Online Calculators, Web Standards
