Rental Income Calculator
Turn rent, vacancy, costs and the loan into monthly cash flow, and find the rent you need for a cash flow target.
Free · runs in your browser · nothing is uploaded
How to use the rental income calculator
- Enter Monthly rent. The example uses $2,400.
- Enter Other income per month. The example uses $0.
- Enter Vacancy as a percentage of rent. The example uses 5.
- Enter Property tax per year and Insurance per year. The example uses $3,600 and $1,200.
- Enter HOA, utilities and other fixed costs per month. The example uses $0.
- Set Maintenance (% of rent) and Capital expenses (% of rent). The example uses 5 and 5.
- Set Property management (% of collected rent). The example uses 8.
- Enter Purchase price, Down payment (as a percentage) and Interest rate. The example uses $300,000, 25 and 6.5.
- Enter Loan term (years) and switch on Interest-only loan only if the loan is interest-only. The example uses 30 and leaves it off.
- Enter Target cash flow per month to see the rent needed. The example uses $300.
Change one input at a time to see which line moves cash flow. The results update as you type. The buttons Reset to examples, Copy summary, Download CSV and Print or save as PDF restore the examples or keep the figures, and the page address holds your inputs, so a link recreates the same result.
Change one input at a time to see which result moves. The address bar keeps your inputs, so you can bookmark or share a scenario. Reset to examples restores the example values.
What is the difference between gross rent, net income and cash flow?
Gross rent is the full rent: $2,400 a month, or $28,800 a year. Net operating income (NOI) is what remains after vacancy and operating costs: $17,491 a year, or $1,458 a month. Cash flow is what remains after the loan payments of $17,066 a year, which leaves $425 a year, or $35 a month.
| Item | Year 1 |
|---|---|
| Gross scheduled rent | $28,800 |
| Vacancy loss | -$1,440 |
| Other income | $0 |
| Income collected | $27,360 |
| Property tax, insurance and fixed costs | -$4,800 |
| Maintenance and capital expenses | -$2,880 |
| Management | -$2,189 |
| Operating expenses | -$9,869 |
| Net operating income | $17,491 |
| Loan payments | -$17,066 |
| Cash flow | $425 |
How do vacancy and management change the result?
Vacancy cuts gross rent, while the costs stay the same. Each point of vacancy costs 1% of $28,800, or $288 a year in this example. Management is 8% of the rent you collect, so it falls as vacancy rises. Enter the vacancy you expect, not the best case.
Rent needed for a cash flow target
The tool solves for the rent that gives your target. The example makes $35 a month, and the target is $300, so cash flow needs to rise by $265 a month. Each extra $1 of gross rent adds $0.774 of cash flow, after the 5% vacancy, the 8% management and the 10% of rent for maintenance and capital costs. So $265 ÷ 0.774 = $342 more rent, and $2,400 + $342 = $2,742, the rent the tool shows.
| Result | Monthly rent |
|---|---|
| Break-even rent (cash flow $0) | $2,354 |
| Current rent (cash flow $35) | $2,400 |
| Rent needed for $300 a month | $2,742 |
If you change a percentage, the rate at which rent turns into cash flow changes too, so run the solver again.
What is break-even rent and break-even occupancy?
Break-even rent is the monthly rent at which cash flow is zero: $2,354 here. Break-even occupancy is the share of full rent you must collect to cover costs and the loan. In the example it is 93.4%: (17,066 + 4,800 + 2,880) ÷ (28,800 × 0.92) = 24,746 ÷ 26,496 = 93.4%. The 0.92 covers the 8% management cost on collected rent. At 93.4%, the unit must be leased for about 11.2 of 12 months.
Where do you find rental income for a tax return?
This calculator does not work out taxable rental income. Check your tax authority’s official guidance on rental income and deductions, or ask a qualified tax adviser.
Frequently asked questions
What is the 2% rule for rental income?
The 2% rule is a rule of thumb that asks whether monthly rent is at least 2% of the purchase price. In the example, $2,400 is 0.8% of $300,000, so this property does not meet it. The tool does not use this rule.
How do I calculate rental income?
Rental income here means the rent you collect. Start with gross rent, subtract vacancy and operating costs for net operating income, then subtract loan payments for cash flow. The example runs from $28,800 of gross rent to $17,491 of NOI and $425 of cash flow a year.
What is the 30% rent rule?
The 30% rent rule is an affordability idea for renters: rent should be about 30% of gross income. Divide the rent by 0.30 to get the income needed. At $2,400 a month, that is $8,000 of gross monthly income.
What is the 7% rule for rental property?
The 7% rule is a rule of thumb that asks whether yearly rent is at least 7% of the purchase price. In the example, $28,800 a year is 9.6% of $300,000, so this property meets it. The rule does not measure cash flow.
What is rental yield?
Rental yield is the yearly rent as a percentage of the purchase price. Gross yield uses the full rent: $28,800 ÷ $300,000 is 9.6% in the example. This calculator does not print that figure, but the rent and price you enter give it directly.
What is the difference between cash flow and ROI?
Cash flow is the money left after rent is collected, costs are paid and the loan is repaid, which is $425 a year in the example. This page does not calculate ROI, which compares profit with the money invested. For a return on your cash, use the cash on cash return calculator, which gives 0.53% on $81,000 invested in the example.
What is a good ROI for a rental property?
This calculator gives no ROI benchmark, because a good return depends on your risk, your financing and what else your money could earn. Enter your own rent, vacancy and loan terms, then use the target cash flow solver to see the rent that meets your monthly goal. The example target of $300 a month needs $2,742 of rent.
Related tools
- noi calculator: use it for income before the loan.
- rental property calculator: use it for projections.
- dscr calculator: use it to see whether the rent covers the loan the way lenders count it.
- 1 percent rule calculator: use it to compare rent with price.
- short term rental calculator: use it to compare with nightly rental.
- cash on cash return calculator: use it for the return on your cash.