Rental Property Cap Rate and Cash Flow Calculator
Calculate net operating income, cap rate and cash flow after annual debt service for a rental property.
Calculate net operating income, cap rate and cash flow after annual debt service for a rental property. Example result: annual net operating income = $16,080.00. Compare your own inputs below. Estimates depend on the stated assumptions and are not a quote or forecast. Defaults are illustrative, not recommendations.
Your result
- Annual net operating income
- $16,080.00
- Cap rate (%)
- 6.432%
- Annual cash flow after debt
- $4,080.00
- Cash-on-cash return (%)
- 6.2769%
With the example inputs, annual net operating income is $16,080.00. Cap rate evaluates the property before financing. Cash-on-cash return evaluates your cash investment after debt service; leverage can improve that figure or amplify losses.
How to use this rental property cap rate and cash flow calculator
- Purchase price: enter the amount in your selected currency. The worked example uses $250,000.00.
- Monthly scheduled rent: enter the amount in your selected currency. The worked example uses $2,200.00.
- Vacancy allowance: enter a percentage using 5 to mean 5%. The worked example uses 5%.
- Annual operating expenses: enter the amount in your selected currency. The worked example uses $9,000.00.
- Annual mortgage debt service: enter the amount in your selected currency. The worked example uses $12,000.00.
- Cash invested including closing: enter the amount in your selected currency. The worked example uses $65,000.00.
Start with figures from the same statement date or planning period. Calculate once, save scenario A, then change one assumption to understand its effect. The comparison shows B minus A; a positive difference means the result increased, which is not automatically better.
Formula and calculation method
NOI = rent × 12 × (1 − vacancy) − operating expenses; cap rate = NOI / price; cash return = (NOI − debt service) / cash invested.
The calculator evaluates this relationship directly in your browser. The displayed precision is for readability and does not imply a guaranteed outcome. Time periods and rate conventions matter: use the exact units in each input label and avoid mixing monthly and annual values.
What the result means
Cap rate evaluates the property before financing. Cash-on-cash return evaluates your cash investment after debt service; leverage can improve that figure or amplify losses.
Two worked examples
1. Illustrative planning scenario
Purchase price = $250,000.00; Monthly scheduled rent = $2,200.00; Vacancy allowance = 5%; Annual operating expenses = $9,000.00; Annual mortgage debt service = $12,000.00; Cash invested including closing = $65,000.00.
Apply the stated formula with these inputs. Monetary examples use USD; percentages are divided by 100 inside the calculation. Intermediate calculations retain full precision and displayed amounts are rounded.
| Output | Calculated result |
|---|---|
| Annual net operating income | $16,080.00 |
| Cap rate (%) | 6.432% |
| Annual cash flow after debt | $4,080.00 |
| Cash-on-cash return (%) | 6.2769% |
2. Simplified calculation check
Purchase price = $200,000.00; Monthly scheduled rent = $2,000.00; Vacancy allowance = 0%; Annual operating expenses = $4,000.00; Annual mortgage debt service = $10,000.00; Cash invested including closing = $50,000.00.
Apply the stated formula with these inputs. Monetary examples use USD; percentages are divided by 100 inside the calculation. Intermediate calculations retain full precision and displayed amounts are rounded.
| Output | Calculated result |
|---|---|
| Annual net operating income | $20,000.00 |
| Cap rate (%) | 10% |
| Annual cash flow after debt | $10,000.00 |
| Cash-on-cash return (%) | 20% |
The second example uses simpler inputs to make the arithmetic easier to check. It is also included in the automated regression suite. These examples illustrate the model and are not market averages, live offers or personalized advice.
Assumptions and limitations
Operating expenses exclude mortgage payments, depreciation and income tax. No appreciation, sale costs or capital expenditures beyond amounts you include.
Use this output to frame a question or compare consistent scenarios. Reconcile any decision involving an actual product, employment agreement or financial statement with its underlying documents. If a contract uses different rounding or timing, its result may differ from this estimate.
Frequently asked questions
Should mortgage payments be included in operating expenses?
No. Enter them separately as debt service so NOI and cap rate remain independent of financing.
How do I interpret the annual net operating income result?
Cap rate evaluates the property before financing. Cash-on-cash return evaluates your cash investment after debt service; leverage can improve that figure or amplify losses.
What assumptions can change this estimate?
Operating expenses exclude mortgage payments, depreciation and income tax. No appreciation, sale costs or capital expenditures beyond amounts you include.
Can I compare two scenarios without creating an account?
Yes. Save scenario A, change one or more inputs to create scenario B, and compare each result with its difference. Neither scenario requires an account.
Can I use this calculator in another currency?
Yes. Select a display currency and enter every monetary input in that currency. This changes formatting only; it does not convert exchange rates or apply local laws. The static worked examples are in USD.
Sources and verification
The following primary sources provide background on the financial concepts. CalcPane’s formula and assumptions above define this specific model; these organizations do not endorse CalcPane or certify its outputs.
Formula implementation and worked examples checked by automated tests on 2026-10-17. Inspect this calculator’s inputs and expected outputs. Read our calculation methodology. Independent professional review has not been completed for this release.
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Cite this calculator
CalcPane. (2026-10-17). Rental Property Cap Rate and Cash Flow Calculator. https://calcpane.com/rental-property-cap-rate-calculator/
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