Rental Property Analyzer
Underwrite a rental like an investor: monthly cash flow after every expense, cap rate, cash-on-cash return, and the 1% rule — plus a 30-year projection of equity and cash flow.
The property
First-year waterfall
Every headline number, traceable from gross rent to cash flow.
| Line | Monthly | Annual |
|---|---|---|
| Gross rent (12 × monthly) | $2,400 | $28,800 |
| Vacancy allowance (5%) | -$120 | -$1,440 |
| Effective rental income | $2,280 | $27,360 |
| Property tax | -$350 | -$4,200 |
| Insurance | -$150 | -$1,800 |
| Maintenance reserve | -$120 | -$1,440 |
| CapEx reserve | -$120 | -$1,440 |
| Property management | -$192 | -$2,304 |
| Net operating income (NOI) | $1,348 | $16,176 |
| Mortgage payments (P&I) | -$1,816 | -$21,793 |
| Pre-tax cash flow | -$468 | -$5,617 |
Stress test
One tap each — see where the deal breaks. Toggle again to clear.
When to sell? — IRR by exit year
Levered IRR if you sell in each year, after 7.0% selling costs. Cash flows grow with your rent and expense assumptions.
Best exit: year 30 at 7.9% IRR — net $790,074 after the sale.
30-year outlook
Equity builds through appreciation and paydown; cash flow compounds month after month.
How the math works
Monthly cash flow is effective rent minus mortgage P&I minus operating expenses. Effective rent discounts gross rent for vacancy. Operating expenses include property tax, insurance, HOA, and three reserves quoted as a percentage of rent: maintenance (ongoing repairs), CapEx (roof, HVAC, appliances), and property management.
Two return metrics answer different questions. Cap rate (annual NOI ÷ price) ignores financing, so it compares properties apples-to-apples. Cash-on-cash return (annual cash flow ÷ cash invested) includes your mortgage and down payment, so it measures the return on the dollars you actually put in. Leverage amplifies cash-on-cash in both directions.
The 1% rule is a screening heuristic, not a valuation: monthly rent should be at least 1% of the purchase price for the property to have a realistic shot at cash-flowing. In expensive coastal markets almost nothing passes — treat a fail as “underwrite carefully,” not “walk away.”
The 30-year projection assumes constant rent, expenses, and appreciation, and a fixed-rate mortgage amortizing on schedule. Real rents and costs move; use it for direction, not precision.
Common questions
Cap rate vs. cash-on-cash — which should I use?+
Use cap rate to compare two properties regardless of how you'd finance them — it strips out the loan entirely. Use cash-on-cash to answer 'what does MY money earn,' since it reflects your down payment, rate, and term. A property can have a mediocre cap rate but a great cash-on-cash return with high leverage (and vice versa).
What is the 1% rule in real estate?+
A quick screening rule: monthly rent should be at least 1% of the purchase price ($2,000 rent on a $200,000 property). It dates to an era of lower prices and higher rates; in many markets today, 0.7–0.8% is more realistic. It tells you whether a deal deserves deeper analysis, never whether to buy.
Why do you budget for CapEx separately from maintenance?+
Maintenance is the drip — leaky faucets, touch-up paint. CapEx is the lumps — a $12,000 roof every 25 years, a $7,000 HVAC every 15. Investors who skip the CapEx reserve feel profitable for years, then get wiped out by one big bill. Budgeting 5% of rent for each is a common starting point.
Should vacancy be counted if I already have a tenant?+
Yes. Even great tenants leave eventually, and turnover costs you a month or more of rent plus make-ready expenses. A 5–8% vacancy allowance across a hold period is realistic for most long-term rentals; price it in even when the unit is currently occupied.