How to Calculate Rental Property
What is Rental Property?
A rental property calculator analyses buy-to-let investment returns: gross and net yield, annual cash flow, ROI, and break-even analysis accounting for mortgage, costs, and vacancy.
Formula
Cap Rate = NOI / Property Value × 100; Cash-on-cash = Annual cashflow / Cash invested × 100
- NOI
- Net Operating Income ($)
- V
- Property Value ($)
- CF
- Annual cash flow ($)
Step-by-Step Guide
- 1Gross yield = (Annual rent / Property value) × 100
- 2Net yield = (Annual rent − Total annual costs) / Property value × 100
- 3Cash-on-cash return = Annual cash flow / Total cash invested × 100
- 4Total costs: mortgage payments, insurance, maintenance, void periods
Worked Examples
Input
Property £250k, rent £1,100/month, costs £3,500/year, mortgage £800/month
Result
Gross yield = 5.28%; Annual cash flow = £13,200−£9,600−£3,500 = £100
Frequently Asked Questions
What's a good cap rate?
5-10% typical. Higher = potentially better return but more risk. Market varies by location and property type.
How do I calculate NOI?
NOI = Gross rental income − operating expenses (property tax, insurance, maintenance, vacancy, management).
What's the difference between cap rate and cash-on-cash return?
Cap rate: theoretical return on property value. Cash-on-cash: actual return on money invested (loan down payment).