Rental Property Calculator

A cap rate of 4–6% is considered good in high-cost urban markets (NYC, SF). In mid-tier markets, 6–8% is typical. In rural or low-cost markets, 8–12%+ is achievable. Higher cap rates usually mean higher risk or lower appreciation potential. Cap rate is calculated before mortgage payments, so it measures a property's unlevered income yield and is best used to compare properties apples-to-apples regardless of financing.

Cash-on-cash (CoC) return measures your annual cash flow divided by the total cash you personally invested — including the down payment, closing costs, and any renovation costs. A CoC of 8–12% is generally considered good. It differs from cap rate in that it accounts for financing: because leverage amplifies returns, CoC can be significantly higher or lower than cap rate depending on whether your mortgage rate is below or above the cap rate (a concept known as positive or negative leverage).

The national average vacancy rate is around 6–8%. Desirable urban markets with high demand may run 3–5%; rural areas or high-turnover properties can run 10–15%. Use your local market data when possible — online rental platforms and the U.S. Census Bureau publish vacancy statistics by metro area. Always use a realistic assumption rather than assuming full occupancy, as vacancy significantly impacts your effective gross income and all return metrics.

Common rules: the 1% Rule — budget 1% of property value annually for maintenance and repairs (e.g., $3,000/year on a $300,000 property). New construction may be closer to 0.5%; older properties or those with deferred maintenance can exceed 2%. The 50% Rule is another quick check: assume roughly 50% of gross rent covers all operating expenses except the mortgage. Both are useful benchmarks, but always adjust for the property's actual age, condition, and market.

GRM = Purchase Price ÷ Annual Gross Rent. A GRM of 10–12 is common in many markets, meaning the property costs 10–12 years of gross rent. Lower GRMs generally indicate better relative value. GRM is a quick screening tool — it ignores operating expenses and financing, so always follow up with a full cap rate and cash-on-cash analysis before making any purchase decision.

Yes. Including an 8–10% management fee even when self-managing shows the property's true investment merit on a like-for-like basis. It also accounts for your time cost and future management needs — if your situation changes, you will want to know the property still works with a manager. Many experienced investors only buy properties that cash flow positively after a fully-loaded expense model including management fees.