Quick answer
A rental analyzer underwrites a deal the way a lender does: every expense line against the rent, then the ratios that decide it. A $320,000 property renting for $2,600 a month with 25% down at 6% produces $249.75 a month of cash flow, a 6.33% cap rate, a 3.47% cash-on-cash return and a DSCR of 1.17 — positive, but thin.
How the Rental Property Analyzer works, step by step
Enter the price, deposit and loan terms, then the rent and every running cost: property tax as a share of price, insurance and HOA in dollars, and reserves for maintenance, vacancy and management as percentages of rent. The analyzer builds the full monthly picture — mortgage payment, each expense line, and what is left — because deals rarely fail on the mortgage; they fail on the five smaller lines buyers forget.
Net operating income (NOI) is rent minus running costs, before the mortgage. The cap rate is NOI divided by price: the return if you owned it outright, and the figure that lets you compare deals of any size. Cash-on-cash divides the after-mortgage cash flow by the cash you put in, deposit plus closing costs — it answers the question the cap rate cannot: what does my money earn?
DSCR divides NOI by the annual mortgage payments. At 1.17 the property earns 17% more than its debt service — positive, but below the 1.25 most conventional lenders want. GRM is price divided by annual rent: 10.3 here, against a rough rule that monthly rent of 1% of price (a GRM of 8.3) marks a strong cash-flow market. The 6.33% cap rate barely exceeds the 6% mortgage rate, so borrowing adds almost nothing to the return.
The tool defaults to a 5% vacancy allowance — about 18 empty days a year — but the Census Bureau put the national rental vacancy rate at 7.6% in the third quarter of 2026, the highest since 2014, so 5% is optimistic in many markets. Maintenance at 5% of rent is the standard reserve for the boiler, roof and appliances that all fail eventually. Deals underwritten at zero for both are underwritten to fail.
The tool calls a deal sound only when cash flow is positive and DSCR reaches 1.25; positive cash flow below that line earns 'positive but thin', and negative cash flow is labelled a speculation, not an investment. The example below is the middle case: it pays, but one vacancy can flip it negative. A deal that survives honest assumptions is a deal; one that needs vacancy and maintenance at zero to work is a hope.
The formula
NOI = (rent − tax − insurance − HOA − maintenance − vacancy − management) × 12. Cap rate = NOI ÷ price. Cash flow = NOI ÷ 12 − mortgage payment. Cash-on-cash = annual cash flow ÷ (deposit + closing costs). DSCR = NOI ÷ annual mortgage payments.
Worked example — try it on the calculator above
Worked example: $320,000 duplex, $2,600 a month rent
Buy at $320,000 with 25% down ($80,000) plus 2% closing costs ($6,400): $86,400 of cash in, a $240,000 loan at 6% over 30 years, and a payment of $1,438.92. Rent is $2,600. Monthly costs: tax $293.33, insurance $150, maintenance $130, vacancy $130 and management $208 — $911.33 of running costs, $2,350.25 all-in with the mortgage. NOI is $20,264 a year, a cap rate of 6.33%. Cash flow is $249.75 a month ($2,996.94 a year), a cash-on-cash return of 3.47%, and the DSCR is 1.17 with a GRM of 10.3. The deal pays, but the margin is thin: at a 7% rate cash flow shrinks to about $92 a month, and at $2,400 rent to about $86.
Frequently Asked Questions
What cap rate is a good deal?
It depends on the market's risk and rates, but roughly: under 4% you are mostly buying appreciation, 5–7% is a balanced income deal, and above 8% usually means a cheaper, rougher market or real work to do. Compare the cap rate with the mortgage rate — when the cap rate is below the rate you borrow at, leverage works against you, not for you.
Why include vacancy and maintenance if the property is occupied and fine?
Because over a ten-year hold both are certainties, just unscheduled. A 5% vacancy allowance is about 18 empty days a year averaged out — the Census Bureau measured a 7.6% national rental vacancy rate in Q3 2026, so 5% is already optimistic in many markets. A 5% maintenance reserve covers the boiler, roof and appliances that all fail eventually. Deals underwritten at zero for both are underwritten to fail.
What DSCR do lenders require?
For conventional investment-property lending, 1.25 is the common floor: the property's income must cover the mortgage payments with 25% to spare. Specialist DSCR loans in 2026 accept 1.0 to 1.25, with 1.25+ earning the best pricing. Below 1.0 the property does not pay its own mortgage and the lender is effectively lending to your salary instead. The example deal at 1.17 would get questions.
Does this include appreciation, tax benefits or loan paydown?
No — it judges year one on income alone, deliberately. Appreciation, principal paydown and tax treatment all add to real returns, but none of them pay a bill in month three. Underwrite the cash flow first; treat the rest as upside, not as the plan.
Estimates, not advice. This calculator provides educational estimates based on the inputs you enter and the assumptions shown on this page. It is not financial, tax or investment advice, and it cannot see your full situation. Verify important figures against official sources, and consider a qualified professional for decisions about your own money. See our Disclaimer and Methodology.