How this target rent calculator works
The calculator solves for gross monthly rent using the selected target: cash flow, DSCR, gross yield or cash-on-cash return. Vacancy and management are treated as percentage deductions from gross rent, while fixed expenses are subtracted monthly.
Cash flow, DSCR, yield and cash-on-cash targets
Cash-flow mode adds a desired monthly cash-flow amount after expenses and mortgage payment. DSCR mode estimates rent needed for a target debt-service coverage ratio. Yield mode estimates rent from annual rent divided by property value, and cash-on-cash mode converts a target return on cash invested into monthly cash flow.
Target rent vs market rent
Target rent is not the same as market rent. This calculator does not check comparable rents, tenancy rules, affordability rules, rent controls or whether a rent target is achievable.
Why vacancy and management affect target rent
Vacancy and management reduce the share of gross rent available for expenses, debt service and the selected target. If those percentages leave no usable rent, some target modes cannot be solved.
Target rent vs break-even rent
Break-even rent focuses on covering costs. Target rent can solve for a selected cash flow, DSCR, yield or cash-on-cash target, so it may be above or below a break-even result.
What this calculator does not include
This calculator does not recommend rent, provide legal or tax guidance, use market data or model local rent rules. It is a general scenario estimate based on your inputs.
Key terms and assumptionsFormula notes, key terms, source assumptions and limits used in this calculator.
These notes are specific to this calculator. Read the property methodology notes for shared property formulas, region settings and estimate limits.
- Target rent
- Target rent is calculated from the selected target mode and the cost assumptions entered.
- Vacancy and management
- Vacancy and management are treated as percentages of gross rent before fixed owner-paid expenses.
- NOI
- Net operating income is rent after vacancy, management and operating expenses, before mortgage payments and tax.
- DSCR
- DSCR compares net operating income with monthly debt service when debt service is above zero.
- Gross yield
- Gross yield is annual gross rent divided by property value when property value is above zero.
- Cash-on-cash return
- Cash-on-cash return is annual cash flow divided by cash invested when cash invested is above zero.
- Market rent
- The calculator does not estimate market rent, recommend rent or check whether a target rent is achievable or allowed.
- Region settings
- Region settings change defaults, labels and currency formatting only. They do not convert exchange rates or create country-specific results.
- General estimate
- The calculator is not financial, tax, legal, mortgage, accounting or investment advice.
Guides and methodology
Plain-English notes that explain the assumptions behind related calculators and tools.
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FAQs
Does this tell me what rent to charge?
No. It estimates rent needed for the target assumptions entered. It is not a market rent estimate, rent recommendation or legal rent check.
Does this use market rent data?
No. It does not use comparable rents, live listings, tenancy data or rent-control rules.
What target modes are supported?
The calculator supports target monthly cash flow, target DSCR, target gross yield and target cash-on-cash return.
What is DSCR?
Debt service coverage ratio compares net operating income with debt service. In this calculator, DSCR mode estimates rent needed for the selected debt coverage target.
What is cash-on-cash return?
Cash-on-cash return compares annual cash flow with cash invested. In cash-on-cash mode, the calculator converts the target return into a monthly cash-flow target and solves for rent.
Why do vacancy and management affect the result?
They reduce the portion of gross rent available to cover expenses, debt service and the selected target.
How is this different from break-even rent?
Break-even rent focuses on covering costs. Target rent can solve for a selected cash flow, DSCR, gross yield or cash-on-cash target above or below break-even.
What if target rent is much higher than current rent?
The calculator shows a warning. A higher target can be useful for scenario planning, but it does not mean the rent is achievable, legal or market-supported.