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Investment Property Calculator: Rental Cash Flow, Cap Rate & Cash-on-Cash Return
Model a rental purchase the way an underwriter and an investor both look at it — gross rent minus vacancy, operating expenses, taxes, insurance, and debt service — so you can see monthly cash flow, cap rate, and cash-on-cash return before you write an offer.
An investment property calculator subtracts vacancy, operating expenses, taxes, insurance, and debt service from gross rent to show monthly cash flow. Cap rate is net operating income divided by purchase price; cash-on-cash return is annual cash flow divided by cash invested. Business-purpose investor financing is underwritten on the property, not personal income.
- ✓Cash flow = gross rent - vacancy - operating expenses - taxes and insurance - debt service.
- ✓Cap rate = net operating income / purchase price and ignores financing; cash-on-cash return includes it.
- ✓Underwriting a business-purpose investor loan focuses on the property and the rents, not personal W-2 income.
- ✓Insurance, HOA dues, and property taxes are the line items that most often break a Florida or Colorado pro forma.
- ✓Illustrative estimate only — not a quote, lock, offer, or commitment to lend.
Written by
Simply Approved Mortgages Team
Licensed Loan Officers · NMLS# 2620881
Get your personalized scenario summary
Complete the short request and a Simply Approved Mortgages Loan Officer sends back a written summary built from your own numbers: estimated payment breakdown, estimated cash to close, the loan structures that fit your file, and what documentation the file will need.
- Estimated monthly payment with taxes and insurance
- Estimated cash to close for your scenario
- Loan options your profile may fit
- Document checklist for your file
Takes about 3 minutes · Summary shown on screen and emailed to you
Illustration only, generated from the information you enter. Not a rate quote, lock, loan estimate, pre-qualification, offer, approval, or commitment to lend. Figures are subject to credit, income, asset and property review and full lender underwriting; binding numbers appear on your Loan Estimate.
Scenario summary
- Purchase price entered
- $412,000
- Down payment entered
- $20,600
- Estimated loan amount
- $391,400
- Estimated cash to close
- $14,300
- Programs reviewed
- 4
Sample layout with example figures — your own numbers replace these. Simply Approved Mortgages LLC · NMLS #2620881 · Equal Housing Opportunity.
Rental Property Cash Flow Calculator
Results
- Effective rent (after vacancy)
- $2,090/mo
- Total operating expenses
- $686/mo
- Net operating income (NOI)
- $1,404/mo
- Monthly cash flow
- $54
- Cap rate
- 5.62%
- Estimated DSCR
- 1.48
Illustrative only, not a quote, lock, offer, or commitment to lend. DSCR is estimated as NOI divided by the estimated annual principal-and-interest portion of PITI you enter; actual DSCR underwriting uses lender-specific documentation such as a lease or Fannie Mae Form 1007. Binding figures appear on your Loan Estimate.
Next steps
Emailing your Rental cash flow calculator scenario opens our secure request form so a Simply Approved Mortgages Loan Officer can review those numbers. Estimates are illustrative and are not a quote, lock, offer, or commitment to lend.
Run your scenario with a loan officer
Share your numbers and a Simply Approved Mortgages Loan Officer sends back an estimated payment, estimated cash to close, and the structures that fit your file. Educational only — not a quote, lock, offer, or commitment to lend.
The Four Numbers That Decide a Rental Deal
- Net operating income — gross rent minus vacancy and operating expenses, before debt service.
- Cap rate — net operating income divided by purchase price. Useful for comparing properties independent of how they are financed.
- Cash flow — what is left after debt service. This is the number that funds repairs and survives a vacancy.
- Cash-on-cash return — annual cash flow divided by the cash actually invested, including down payment, closing costs, and initial repairs.
Expenses Investors Routinely Understate
- Vacancy — modeling 0% occupancy loss makes every deal look good; 5%-8% is a more realistic planning range in most markets.
- Maintenance and capital reserves — roofs, HVAC, and water heaters are certainties, not surprises.
- Property management, even for self-managed properties, because your time has a replacement cost.
- Insurance — Florida coastal and windstorm exposure, and Colorado wildfire exposure, can move premiums substantially year to year.
- HOA dues, special assessments, and, in some Florida condominium associations, statutory reserve funding requirements.
Want these numbers built around your file?
A short request is all it takes to get a written scenario summary back from a Simply Approved Mortgages Loan Officer. Binding figures appear on your Loan Estimate.
How Investor Financing Is Underwritten
Business-purpose investor loans are generally qualified on the property's ability to carry the debt rather than on personal income documentation. Debt service coverage ratio programs compare market or in-place rent to the property's principal, interest, taxes, insurance, and association dues. That is a different calculation from the cash-flow analysis on this page: coverage ratio is the lender's test, and cash flow is your test. A deal can clear one and fail the other.
Consumer vs Business-Purpose Availability
Simply Approved Mortgages LLC arranges residential consumer mortgage loans in Florida and Colorado. Business-purpose investor loan products may be arranged in additional states only where permitted by applicable law and pursuant to applicable licensing requirements or exemptions. This page is educational; availability, terms, and eligibility vary by borrower, property, lender, program, and state.
The pro formas that fall apart after closing almost always share one trait: the insurance quote was an estimate rather than a bound premium. Before we clear an investor file in Florida, we want the real premium in writing, because a $2,400 assumption that lands at $6,800 turns positive cash flow negative on its own. Run the calculator twice — once with your target numbers and once with the actual tax bill and bound insurance quote — and make the decision on the second run.
Compare loan officer compensation on your mortgage quote
Loan officer compensation is part of the cost of a mortgage. On eligible residential loans, Simply Approved Mortgages generally uses 1.5% lender-paid compensation. Enter the compensation shown on another lender's Loan Estimate to see the difference in dollars.
Compensation difference on this illustration: $3,750.
How lower compensation can help you
When less compensation is built into pricing, there can be room for a lower interest rate, which may lower your monthly payment.
Depending on the rate you choose, pricing can sometimes include a lender credit toward third-party closing costs, so you may bring less cash to closing.
A lower rate means a lower monthly payment, which can lower your debt-to-income ratio and may help you qualify for more home on the same income.
As a mortgage broker we compare pricing from wholesale lenders instead of offering a single bank’s retail pricing.
Tip: On page 2 of your Loan Estimate, look at Section A, "Origination Charges." If the lender pays the loan officer, that compensation usually does not appear there as its own line; it is built into the interest rate. That is why comparing the rate and any lender credits side by side matters.
Already have a Loan Estimate from another bank or broker? Share it with a Simply Approved Mortgages Loan Officer, who will compare the rate, fees and credits side by side with options we can arrange. No cost to request a review.
Illustration only — not a quote, lock, offer, or commitment to lend; binding figures appear on your Loan Estimate. Lender-paid compensation is paid by the lender, not directly by you, and is part of the loan's pricing, so the loan is not free of costs. A lower compensation figure does not by itself guarantee a lower rate or lower closing costs; individual results vary by credit, loan type, property and market conditions. Residential lending in FL and CO only. Simply Approved Mortgages LLC · NMLS #2620881 · Equal Housing Opportunity.
Purchase market update
What buyers should know this month
30-Yr Fixed · national avg
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15-Yr Fixed · national avg
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2026 buying power
Conforming baseline: $832,750
FHA floor / ceiling: $541,287 – $1,249,125
Compare a long-term lease, Section 8, and a short-term rental
The same house produces three different files depending on how you rent it. Enter your payment and your own operating assumptions, pick the county so the voucher column starts from the published Fair Market Rent, and compare what is left for debt service under each strategy. Every figure is an illustrative estimate, not a quote, lock, offer, approval, or commitment to lend, and none of it is a projection of what your property will earn.
Shared inputs
Published Fair Market Rent for this selection: loading… a month. HUD source
Lease and voucher assumptions
Short-term rental assumptions
Optional. We look up published market performance for the address and fill the nightly rate and occupancy below. You can edit both afterwards.
Short-term operating costs are usually the largest of the three strategies, and the gross figure alone is never the comparison.
| Strategy | Gross after vacancy | Net before debt service | Cash flow vs PITIA | Coverage ratio |
|---|---|---|---|---|
| Long-term lease12-month lease, market rent | $2,444 | $2,200 | $-200 | 0.92 |
| Housing Choice Voucher (Section 8)HUD Fair Market Rent × payment standard | $0 | $0 | $-2,400 | — |
| Short-term rentalNightly rate × occupancy | $3,705 | $2,297 | $-103 | 0.96 |
On the assumptions entered, short-term rental leaves the most income before debt service. That is arithmetic, not advice: the strategy a lender will actually underwrite depends on the documentation available, the program, and whether the use is permitted at the address.
Long-term lease
- What underwriting reads
- The executed lease or the appraiser rent schedule (Form 1007/1025), commonly the lower of the two.
- Income pattern
- One tenant, one renewal cycle a year.
- What to check first
- A single move-out takes the whole income to zero until it re-leases.
Housing Choice Voucher (Section 8)
- What underwriting reads
- The executed HAP contract plus the tenant portion, generally compared with market rent.
- Income pattern
- The agency portion is paid by the PHA on a set schedule; the tenant portion stays your collection risk.
- What to check first
- The unit must pass inspection, and the PHA has to find the rent reasonable before the contract starts.
Short-term rental
- What underwriting reads
- Twelve months of platform or property-manager statements, or a market revenue projection where a program accepts one.
- Income pattern
- Seasonal and event-driven; revenue can swing widely month to month.
- What to check first
- Local ordinances, HOA rules, licensing, and a landlord policy that does not cover nightly stays.
Next steps
Emailing your Rental strategy comparison scenario opens our secure request form so a Simply Approved Mortgages Loan Officer can review those numbers. Estimates are illustrative and are not a quote, lock, offer, or commitment to lend.
Assumptions, methodology, and limitations
Each column starts from the income you enter, reduces it by the vacancy allowance you enter, then subtracts the operating-cost percentage you enter to reach net income before debt service. The voucher column starts from the published HUD Fair Market Rent for the county and unit size you select, multiplied by the payment standard percentage you enter. The short-term column multiplies your nightly rate by 30.42 average nights a month and your occupancy percentage. Coverage ratio divides net income before debt service by the monthly PITIA you enter.
Every figure is an estimate built from your own inputs and is not a quote, rate lock, offer, approval, or commitment to lend, and it is not a projection of income the property will earn. A Fair Market Rent is a published schedule, not an approved rent: the public housing agency sets the payment standard, must find the rent reasonable against comparable unassisted units, and must pass the unit at inspection before a contract begins. Short-term rental use may be restricted or prohibited by local ordinance or HOA rules, and requires insurance written for nightly stays. Lenders differ on which documents they will accept for each strategy and on how they treat vacancy and expenses, and program parameters can change without notice.
Results are illustrative estimates only and are not a quote, lock, offer, or commitment to lend. No rate, APR, or program approval is implied. Binding figures appear on your Loan Estimate. Eligibility, terms, and availability vary by borrower, property, lender, loan program, and state.
Related tools
Tools for a rental property file
Only the estimators that apply to this kind of file. Every output is an illustrative estimate built from figures you enter — not a quote, rate lock, offer, approval, or commitment to lend.
Business-purpose loans are for non-owner-occupied property only. Program availability, leverage and terms vary by state, property and program, and can change without notice. Simply Approved Mortgages LLC is a mortgage broker and arranges, but does not make, loans. Equal Housing Opportunity.
Investment Property Calculator FAQs
Answers to the most common investment property calculator questions, written by licensed loan officers.
Ask SAM anything about mortgages
SAM is the Simply Approved Mortgages AI assistant. It answers general questions using the reviewed guides published on this site and links you to the primary government source. It is educational only — it does not quote a rate, payment, APR, approval or commitment to lend. A Simply Approved Mortgages Loan Officer reviews every scenario before any terms are confirmed.
Hi, I'm SAM — an AI assistant for Simply Approved Mortgages. I can explain loan programs, closing costs, DTI, down payments and which calculator or guide to use. I'm not a licensed loan officer, and nothing here is a quote, approval or commitment to lend.
Ask Sam AI provides general educational information only. It is an automated assistant, may be incomplete or out of date, and does not provide legal, tax or financial advice. Nothing it produces is a rate quote, APR, pre-approval, offer or commitment to lend. Never share a Social Security number, ITIN, date of birth, account number or password in chat. Simply Approved Mortgages LLC (NMLS #2620881) arranges residential mortgage loans in Florida and Colorado. Eligibility, terms, conditions and availability vary by borrower, property, lender, loan program and state, and all loans are subject to lender underwriting and approval. Equal Housing Opportunity.
Trusted government resources
These independent government resources can help you research mortgage programs, rates, and your rights before you apply.
Internal Revenue Service
Residential rental property — tax treatment of income and expenses
U.S. Census Bureau
American Community Survey housing and rent data
HUD USER
Fair Market Rents by county
Simply Approved Mortgages is not affiliated with HUD, the CFPB, the FTC, the VA, or any other government agency. Links are provided for your independent verification.
How this page connects
Where this fits in the DSCR and investor financing library
This page sits inside our DSCR and investor financing coverage.
What most readers open next
- DSCR qualifying requirementsBecause coverage, reserves, experience, and entity rules in one place.
- The short-term rental analyzerBecause nightly-rate markets need a different income test than long-term rent.
- Financing voucher-occupied rentalsBecause payment standards and HAP contracts change how rent is documented.
- DSCR cash-out refinanceBecause the usual way investors recycle equity into the next purchase.
Explore the full guide
Keep reading — the rest of the buying playbook
Each of these is a deep-dive on one piece of the purchase mortgage process. Bookmark whichever you need next.
Guide
DSCR Calculator
Run the lender coverage-ratio test on the same property.
Read the guide →Guide
Investment Property Loans
How investor financing is structured and qualified.
Read the guide →Guide
DSCR Loans
Property-qualified financing for rental purchases and refinances.
Read the guide →Guide
LLC Vesting for Investors
Holding rental property in an entity and what lenders require.
Read the guide →Guide
Home Value Estimator
Start with a value estimate before you build the pro forma.
Read the guide →Guide
Rent vs Buy Calculator
The owner-occupant version of the same total-cost math.
Read the guide →Internal library
Related mortgage guides across our library
Follow the next relevant guide for your scenario.
Start My Approval
Complete this short request and a Simply Approved Mortgages Loan Officer will personally review your scenario. The form only asks what your program actually needs. Submitting it is not an application for credit and is not a commitment to lend.
What are you looking to do?
Pick one — the form adapts.Pick a loan type
Programs for buying a home.Conventional loan — 3–20% down · 620+ FICO
Tell us about your scenario
The form below is tailored to Conventional loan — only the questions and documents your program needs.
Simply Approved Mortgages LLC is licensed to arrange residential mortgage loans in Florida and Colorado only. We ask first so we never collect a mortgage inquiry we are not licensed to act on.
Purchase price and down payment help us size the conforming loan.
A range is enough here — no credit report is pulled and your credit is not affected.
Illustrative estimate only — not a quote, rate lock, offer of credit, or commitment to lend.
Submitting this form is not an application for credit and is not a commitment to lend. No credit report is pulled at this step.
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- 1Sign in to your Google account and search a mortgage topic such as "mortgage rates".
- 2Select the icon next to "Top stories" to open the preferred sources panel.
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Preferred sources is a Google Search feature controlled entirely by you and by Google. Simply Approved Mortgages LLC (NMLS #2620881) does not control search results and makes no representation about how or whether our content will appear. Educational content only — not a quote, lock, offer, or commitment to lend.
Simplify Your Mortgage Journey with These Resources
Talk To A Loan Officer
A Simply Approved Mortgages Loan Officer will personally connect with you to walk through your options.
Mortgage insights & guides
Plain-language articles to help you understand the home loan process, save on closing costs, and make confident decisions.
7 things every first-time homebuyer should know before applying
From credit prep to down payment assistance, here’s how to walk into your first mortgage application with confidence.
Using your VA loan benefit: a step-by-step guide
Eligibility, the Certificate of Eligibility, funding fees, and how to maximize zero-down purchasing power.
Where your closing costs actually go (and where you can save)
A line-by-line breakdown of the Loan Estimate and the fees that are negotiable versus fixed.
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Simply Approved Mortgages LLC | NMLS #2620881
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Equal Housing Opportunity
Broker identification. Simply Approved Mortgages LLC is a mortgage broker and is not a direct lender. We arrange residential mortgage loans with third-party wholesale lenders and do not make the lender's final credit decision or fund the loan. We arrange residential mortgage loans in Florida and Colorado. Business-purpose mortgage products may be arranged in additional states only where permitted by applicable law and pursuant to applicable licensing requirements or exemptions.
Credit and program terms. All loans are subject to lender credit approval, underwriting, acceptable appraisal or valuation when required, title review, insurance, and supporting documentation. Eligibility, programs, rates, APRs, points, lender credits, fees, payments, terms, loan amounts, down-payment requirements, mortgage insurance, and availability may vary based on borrower, property, occupancy, credit profile, loan-to-value ratio, debt-to-income ratio, lender, loan program, and state and may change without notice. Not all applicants, properties, products, or programs will qualify or be available in every state. Nothing on this site constitutes a loan approval, rate lock, offer, commitment to lend, guarantee of approval, or guarantee of terms or closing.
Rates, payments and calculators. Rates, APRs, payments, down payments, loan amounts, home values, estimated equity, savings, affordability estimates, closing costs, and other calculator or scenario results displayed on this site are estimates or illustrations unless expressly stated otherwise. Actual loan terms may differ. Taxes, homeowners insurance, mortgage insurance, association dues, lender charges, broker compensation, discount points, third-party charges, and other costs may apply. Advertised rates, payments, APRs, down payments, and other credit terms are subject to the assumptions and disclosures presented with the applicable advertisement. Applicable loan terms and disclosures will be provided as required for the particular transaction.
Mortgage products. FHA, VA, USDA, conventional, jumbo, non-QM, HELOC, reverse mortgage, down-payment-assistance, investment-property, DSCR, and other mortgage products referenced on this site are subject to their individual eligibility, underwriting, property, occupancy, and program requirements. Product availability varies by lender and jurisdiction. References to a mortgage product or program do not constitute a determination that a borrower or property qualifies.
Government-backed programs. Government-backed or government-insured mortgage programs referenced on this site may be subject to requirements established by the applicable government agency in addition to lender requirements. Government insurance or guaranties generally protect participating lenders against certain losses and do not constitute a guarantee of borrower approval.
Business-purpose products. DSCR, investment-property, and other business-purpose mortgage products referenced on this site are intended for qualifying business-purpose transactions. Business-purpose loans may be subject to different requirements and protections than consumer-purpose residential mortgage loans. Borrowers are responsible for accurately disclosing property occupancy and intended use.
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