Using the Real Estate Calculator
Enter rent before vacancy, then supply a vacancy assumption and annual operating expenses. Keep mortgage payments in their own field so they are subtracted from cash flow rather than from net operating income.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Property purchase price
- 250000
- Monthly rent
- 2000
- Vacancy (%)
- 5
- Annual operating expenses
- 6000
- Annual mortgage payments
- 12000
- Cash invested
- 60000
Example result
- Net operating income
- 16,800
- Capitalization rate (%)
- 6.72
- Annual cash flow
- 4,800
- Cash-on-cash return (%)
- 8
Method and assumptions
Operating income excludes debt service; cash flow subtracts mortgage payments. Does not include appreciation, sale costs or tax effects.
Build a complete housing comparison
A housing calculation usually answers one part of a larger decision. Keep the purchase price, financing, recurring ownership expenses and eventual sale assumptions in separate lines of your budget. This makes it easier to spot costs omitted by a particular model. When comparing alternatives, use the same time horizon and currency for both.
Common question
Why is the capitalization rate different from cash-on-cash return?
Capitalization rate compares operating income with the property price. Cash-on-cash return compares cash flow after debt payments with the cash invested, so financing affects the latter.
Guide updated .