What This Calculator Does
Combines purchase details, financing, and operating assumptions into one view covering monthly cash flow, cap rate, cash-on-cash return, DSCR, and projected proceeds at a future sale.
Who Is This For
Investors who want more than a rough estimate before committing to a purchase, landlords benchmarking a prospective acquisition, and anyone stress-testing an investment property's numbers.
How It Works
Enter the purchase price, down payment, expected rental income, and operating expenses, then set a holding period and appreciation assumption to generate the full set of investment metrics.
Frequently Asked Questions
What is a reasonable cap rate to target?
A reasonable target depends on asset type, location, and your risk tolerance; use the cap rate output as one comparison point among several rather than a single pass/fail threshold.
What does DSCR mean in this context?
DSCR, or debt service coverage ratio, measures whether net operating income — rent after vacancy, operating expenses, and the repairs reserve — covers the mortgage payment; a ratio above 1.0 means that net income exceeds the required payment, and lenders often set their own minimum threshold for investment loans.
How is cash-on-cash return calculated?
Cash-on-cash return divides annual cash flow by total cash invested, isolating the return on the money you actually put in rather than the property's full value.
Should I model appreciation in my analysis?
Appreciation can be included as an input, but treat it as an assumption you control rather than a certainty; build the case so the cash flow holds up even if appreciation underperforms your estimate.