Rental property ROI calculator 2026
Work out a rental’s cash flow, returns and depreciation, with a deal score and a 10-year projection. It’s an estimate from your numbers, not advice; Krystal checks the real picture on a call.
Property
Gross rent yield: 7.5%
Land isn’t depreciable. Typical range for residential: 15–25%.
Financing
100% means an all-cash purchase.
$70,000
$10,500
| Loan | Amount |
|---|---|
| Loan amount | $280,000 |
| Cash needed at closing | $80,500 |
Operating expenses
Enter your county's actual property tax rate.
$642/mo
$150/mo
Share of rent set aside for repairs and capital expenses.
$110/mo
5% is about 18 days vacant a year.
$110/mo
0% if you manage it yourself; 8–12% for a property manager.
$0/mo
| Expenses | Monthly |
|---|---|
| Property tax | $642 |
| Insurance | $150 |
| HOA | $0 |
| Maintenance | $110 |
| Vacancy | $110 |
| Management | $0 |
| Operating expenses (before the mortgage) | $1,012 |
Growth and tax
Example assumption; enter what you expect for this property.
Example assumption; past appreciation doesn't predict future appreciation.
These assumptions drive the 10-year projection and the sale figures. Actual results depend on the market.
Monthly cash flow
Deal score 17/100-$675 a month
Negative: the rent doesn’t cover the mortgage and expenses. That’s -$8,094 a year.
Comparison
Cash-on-cash return: -10.1%
| Item | Value |
|---|---|
| Cash-on-cash return | -10.1% |
| Deal score: Pass | 17/100 |
Where the rent goes
Monthly cash flow
−$675net
Gross rent: $2,200
| Label | Value |
|---|---|
| Gross rent | $2,200 |
| Vacancy (5%) | −$110 |
| Effective rent | $2,090 |
| Mortgage (principal and interest) | −$1,863 |
| Property tax | −$642 |
| Insurance | −$150 |
| Maintenance | −$110 |
| Each month | Amount |
|---|---|
| Gross rent | $2,200 |
| Vacancy (5%) | −$110 |
| Effective rent | $2,090 |
| Mortgage (principal and interest) | −$1,863 |
| Property tax | −$642 |
| Insurance | −$150 |
| Maintenance | −$110 |
| Net cash flow | −$675 |
Returns
- Cap rate4.1%
Net operating income ÷ price; return before financing.
Weak · DFW average 5.5%
- Cash-on-cash return-10.1%
Annual cash flow ÷ the cash you put in.
Weak · Target 8%+
- Total return, year 113.9%
Cash flow, appreciation, loan paydown and tax savings together.
Fair · 15%+ is strong
- Gross rent multiplier13.3×
Price ÷ annual rent; a quick screen. Lower is better.
Fair · Target under 12×
- Debt coverage ratio0.64
Net operating income ÷ annual mortgage payments.
Weak · Lender minimum 1.25
| Figure | Amount |
|---|---|
| Net operating income, a year | $14,260 |
| Mortgage payments, a year | $22,354 |
| Total cash invested | $80,500 |
| Loan amount | $280,000 |
Depreciation
| Line | Amount |
|---|---|
| Purchase price | $350,000 |
| Less land (20%) | −$70,000 |
| Depreciable basis | $280,000 |
| Depreciation a year (÷ 27.5 years) | $10,182 |
| Tax savings a year (at 24%) | $2,444 |
| Cash flow before tax savings, a month | -$675 |
| Tax savings, a month | +$204 |
| Cash flow with tax savings, a month | -$471 |
A cost segregation study can move part of the basis into shorter lives and front-load the deduction. Try the cost segregation calculator.
Deal score
17/100Pass
Deal score: 17/100, Pass
| Mark | Value |
|---|---|
| Deal score | 17/100, Pass |
Deal score factors
- Cash-on-Cash Return0/25Hurts · Low cash-on-cash return
- Cap Rate5/20Hurts · Below market average cap rate
- Monthly Cash Flow0/20Hurts · Negative cash flow - property loses money monthly
- Debt Coverage Ratio0/15Hurts · Property cannot cover debt service
- Total ROI12/20Helps · Good total return including appreciation
Cash-on-Cash Return: 0/25
| Item | Value |
|---|---|
| Cash-on-Cash Return | 0/25 |
| Cap Rate | 5/20 |
| Monthly Cash Flow | 0/20 |
| Debt Coverage Ratio | 0/15 |
| Total ROI | 12/20 |
5-year projection
| Year | Rent | Cash flow | Equity | Tax savings | Total wealth |
|---|---|---|---|---|---|
| Year 1 | $26,400 | -$8,094 | $2,844 | $2,444 | $11,194 |
| Year 2 | $27,192 | -$7,381 | $5,894 | $4,887 | $23,866 |
| Year 3 | $28,008 | -$6,647 | $9,165 | $7,331 | $38,075 |
| Year 4 | $28,848 | -$5,891 | $12,671 | $9,775 | $53,883 |
| Year 5 | $29,713 | -$5,112 | $16,432 | $12,218 | $71,352 |
| Through year 5 | Amount |
|---|---|
| Cumulative cash flow | -$33,126 |
| Equity from loan paydown | $16,432 |
| Appreciation | $75,829 |
| Property value, year 5 | $425,829 |
If you sell in year 5: 43.9% total return
| Sale | Amount |
|---|---|
| Estimated sale price (+21.7%) | $425,829 |
| Remaining mortgage | $263,568 |
| Net proceeds, after 6% selling costs | $136,710 |
| Cash flow received | -$33,126 |
| Tax savings received | $12,218 |
| Less cash invested | −$80,500 |
| Net profit | $35,303 |
| Return | Rate |
|---|---|
| Total return over 5 years | 43.9% |
| Annualized (compounded yearly) | 7.5% |
Assumes 4.0% appreciation a year. Leaves out depreciation recapture tax and capital gains tax on the sale.
An estimate for education, not tax or investment advice. It uses straight-line depreciation over 27.5 years, applies the vacancy rate evenly, grows rent and value at the rates you set, leaves out capital improvements, and values the tax savings at the bracket you chose.
Method
How the estimate works.
Cap rate and cash-on-cash return
Cap rate is net operating income (rent less operating expenses, before the mortgage) divided by the price. It measures the property’s return without financing.
Cash-on-cash return is your annual cash flow after the mortgage divided by the cash you put in: down payment plus closing costs. If you put $77,000 in and net $6,000 a year, that’s 7.8%.
Total return
Cash flow is one part of the return. The year 1 total adds four parts:
- Cash flow: rent left after every expense and the mortgage
- Appreciation: the rise in value, at the rate you set
- Equity: the part of each mortgage payment that pays down principal
- Tax savings: the depreciation deduction at your bracket
Depreciation
Residential rental buildings (not land) are depreciated over 27.5 years. On a $350,000 property with 20% land value, that’s a $10,182 deduction a year; at a 24% bracket, about $2,444 in tax savings. The calculator leaves out depreciation recapture when you sell.
The deal score
A 0–100 screen built from cash-on-cash return, cap rate, monthly cash flow, debt coverage and total return, each scored against the benchmarks shown in the results. It’s a first filter, not a verdict on the property.
FAQ
Rental property questions.
What is a good cap rate for DFW rental properties?
The average cap rate in the Dallas-Fort Worth area ranges from 5-7% depending on the neighborhood and property type. Class A properties in desirable areas may have lower cap rates (4-5%) while Class B/C properties in emerging areas can yield 6-8%. A cap rate above the market average suggests a better investment opportunity, but must be balanced against property condition and tenant quality.
How much cash flow should a rental property generate?
Most investors target a minimum of $200 per door per month in positive cash flow for single-family rentals. For multi-family properties, $100-150 per unit is common. However, this depends on your investment strategy. Some investors accept lower cash flow for properties with higher appreciation potential or in premium locations.
What expenses should I include in my rental property analysis?
A thorough analysis should include: mortgage payment (P&I), property taxes (enter your county's actual property tax rate), insurance, maintenance reserves (5-10% of rent), vacancy reserves (5-8%), property management fees (8-12% if applicable), HOA dues, and any utilities you pay. Don't forget one-time costs like closing costs and any initial repairs.
How do tax benefits affect my rental property return?
Rental properties offer significant tax benefits through depreciation. You can deduct the building value (excluding land) over 27.5 years, which often creates a "paper loss" even when you're cash flow positive. This depreciation deduction reduces your taxable income, effectively increasing your after-tax return. A property generating $500/month cash flow might have an additional $200+/month in tax savings.
Should I pay cash or finance a rental property?
Financing typically provides better returns through leverage. With a $100K down payment, you could buy one $500K property cash or five $100K down properties financed. While financing increases risk, it also amplifies returns. Cash-on-cash return and total ROI are usually higher with financing because you're earning returns on the bank's money. However, paying cash provides more security and stronger cash flow.
What is the 1% rule for rental properties?
The 1% rule is a quick screening tool: monthly rent should be at least 1% of the purchase price. A $300K property should rent for $3,000/month. While useful for quick evaluation, this rule is often difficult to achieve in high-cost markets like DFW. Many successful investors use 0.7-0.8% in competitive markets, focusing on appreciation and tax benefits alongside cash flow.
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Krystal calls you to see whether LeCPA fits what you’re building.