Rental Property Calculator

These notes are specific to this calculator. Read the property methodology notes for shared property formulas, region settings and estimate limits.

Monthly cash flow

Monthly cash flow is estimated rental income after vacancy and operating expenses, minus the mortgage payment. It is a pre-tax cash-flow estimate, not a complete profit forecast.

Gross yield

Gross yield compares annual gross rent with purchase price before expenses. It is useful for quick rent-to-price comparisons, but it does not show whether the property is cash-flow positive.

Net operating income (NOI)

Net operating income, or NOI, is rental income after vacancy and operating expenses, before mortgage payments and tax. It helps separate the property operation from the financing structure.

Net yield / capitalization rate (cap rate)

Net yield, also called capitalization rate or cap rate, is annual NOI divided by property value. It looks at the property before financing and tax.

Cash-on-cash return

Cash-on-cash return compares estimated annual cash flow with the upfront cash invested. It includes the mortgage payment, so it can be negative even when the property has positive NOI.

Debt service coverage ratio (DSCR)

Debt service coverage ratio, or DSCR, compares NOI with mortgage payments. Above 1.0 means estimated rent after operating expenses covers the debt payment before tax; below 1.0 means it does not.

Break-even rent

Break-even rent estimates the gross monthly rent needed to cover vacancy, property management, fixed operating expenses and the mortgage payment.

Loan-to-value

Loan-to-value is loan amount divided by property value. A higher loan-to-value means more leverage and usually less cash buffer.

Upfront cash needed

Upfront cash needed includes the down payment or deposit, purchase costs and initial repairs entered in the calculator.

Building insurance vs landlord insurance

Building or house insurance generally relates to the property structure. Landlord insurance or liability cover may relate to liability, contents, loss of rent or landlord protection.

Service charge / HOA / body corporate / strata fees

Shared-property fees vary by region and property type. Some include building insurance and some do not, so check what is included before entering both shared fees and building insurance.

Capital expense reserve

A capital expense reserve is a monthly cash-flow planning allowance for larger replacements such as roofing, heating, hot water, appliances, flooring and exterior work. It is separate from routine maintenance and is not automatically treated as tax deductible.

Effective rent

Effective rent is gross rent after the calculator subtracts vacancy and arrears allowances. It is the rent figure used before operating expenses and mortgage payments are applied.

Sale and return projection

The optional sale projection estimates sale value, selling costs, remaining loan balance, cumulative cash flow and total profit before tax. It is assumption-based and keeps rent and expenses flat for this estimate.

Capital gain before tax

Capital gain before tax is estimated sale price minus purchase price and selling costs. It does not include country-specific sale tax, depreciation recapture or other local tax treatment.

Alternative annual return / opportunity cost

The alternative annual return is a simple comparison rate for what the upfront cash might earn outside the property scenario. It is an assumption, not a forecast.

Annualised return

Annualised return converts the projected total return into an estimated yearly rate over the holding period. It is before tax and depends on the growth, selling cost and cash-flow assumptions entered.