Calculate monthly cash flow, cash-on-cash return, and DSCR for rental properties with financing.
How to Use This Calculator
Enter purchase price, down payment, interest rate, loan term, monthly rent, and all operating expenses. Monthly cash flow, cash-on-cash return, mortgage payment, DSCR, and down payment amount all update immediately. Default values are pre-filled so you see results right away.
Formula & Background
Effective Rent = Monthly Rent × (1 − Vacancy Rate). Monthly Cash Flow = Effective Rent − (Mortgage Payment + Monthly Expenses). Cash-on-Cash Return = Annual Cash Flow ÷ Down Payment × 100%. DSCR = Annual NOI ÷ Annual Mortgage Payments — lenders typically require 1.25+.
Calculation Example
$250,000 purchase, 25% down ($62,500), 7% rate, 30-year loan, $2,000 rent, 5% vacancy, $3,000 tax, $1,500 insurance, $2,500 maintenance, 10% management:
Mortgage = $1,247/mo. Effective rent = $1,900. Total expenses = $2,020. Monthly cash flow = −$120. CoC = −2.3%. DSCR = 0.90 (below the 1.25 lender threshold).
Expert Tips
- Target positive cash flow from day one — relying on appreciation alone is speculation, not income investing.
- A DSCR below 1.0 means the property cannot cover its own debt — most investment property lenders will not approve the loan.
- Every 1% reduction in vacancy rate adds roughly 1% to annual cash flow — tenant retention compounds quickly.
- Budget a 10% management fee even when self-managing; this tests whether the deal works at full cost and protects your model if you hire later.
For a financing-neutral top-line yield check, use the Rental Yield Calculator before running a full cash flow analysis. The Mortgage Calculator helps you model different loan scenarios to find the optimal financing structure for your deal.
Frequently Asked Questions
What is DSCR?
Debt Service Coverage Ratio = Annual NOI ÷ Annual Mortgage Payments. Lenders typically require 1.25+ for investment property loans. A DSCR below 1.0 means the property does not generate enough income to cover the mortgage — most lenders will decline the loan.
What is cash-on-cash return?
It measures annual return on the actual cash you invested (down payment + closing costs). A 10% CoC means you earn $10,000/year on a $100,000 cash outlay. CoC ignores appreciation and mortgage pay-down, making it a conservative, income-focused metric.
What monthly cash flow is considered good?
Many investors target $100–$300/month positive cash flow per unit as a minimum buffer for repairs and vacancies. In high-cost markets, breaking even can be acceptable if appreciation is strong, but negative cash flow requires ongoing out-of-pocket contributions.
How does vacancy rate affect returns?
A 5% vacancy rate reduces your effective annual rent by 5%, which flows directly through to reduced cash flow and CoC return. Always model at least 5% vacancy — every rental property has turnover and periodic maintenance downtime between tenants.
Should I factor in property management fees?
Yes — even if self-managing, budget 8–10% management fees. It tests whether the investment works at full cost and protects your financial model if you later hire a manager. Self-management time has real opportunity cost that should be reflected in your analysis.