Real Estate Calculator
Analyze rentals, flips, and BRRRR deals with cap rate, cash flow, cash-on-cash return, NOI, DSCR, and GRM. Model ARV, holding costs, 70% rule, and sensitivity to rent, rate, vacancy, and expenses. Flexible expense entry and PITI calculator included. All calculations run locally in your browser for complete privacy.
What Is a Real Estate Calculator?
A real estate investment calculator evaluates a property's financial performance across multiple dimensions: net operating income (NOI), cap rate, cash-on-cash return, debt service coverage ratio (DSCR), and gross rent multiplier (GRM). Together these metrics let you compare deals on a standardized basis — whether you're analyzing a rental, a flip, or a BRRRR acquisition.
Unlike a simple mortgage calculator, a real estate calculator separates operating income from financing, which is essential for comparing deals funded differently. It also computes DSCR — the ratio lenders check to approve investment property loans — so you can see whether a deal qualifies for financing before you make an offer.
Enter the purchase price, rental income, operating expenses, and financing details to get a complete financial snapshot in seconds.
How to Use This Real Estate Calculator
- Enter the purchase price and down payment.
- Enter gross monthly rent (all units combined) and vacancy rate.
- Enter monthly operating expenses: taxes, insurance, management, maintenance, HOA. Do not include mortgage payment.
- Enter mortgage rate and loan term for financing-dependent metrics.
- Review: NOI, cap rate, monthly cash flow, cash-on-cash return, DSCR, and GRM in the results.
Worked Example: Sarah's $300,000 Duplex
Sarah is analyzing a $300,000 duplex with 20% down ($60,000). Each unit rents for $1,200/month ($2,400 gross). Operating expenses: $667/month ($8,000/year). Mortgage: $1,598/month (7%, 30yr, $240,000).
| Metric | Calculation | Result |
|---|---|---|
| Effective Gross Income | $2,400 × 0.95 × 12 | $27,360/yr |
| NOI | $27,360 − $8,000 | $19,360/yr |
| Cap Rate | $19,360 ÷ $300,000 | 6.5% |
| Annual Cash Flow | $19,360 − $19,176 | +$184/yr (+$15/mo) |
| Cash-on-Cash Return | $184 ÷ $60,000 | 0.3% |
| DSCR | $19,360 ÷ $19,176 | 1.01 (marginal) |
| GRM | $300,000 ÷ $28,800 | 10.4 |
The deal has a decent cap rate (6.5%) but minimal cash flow at 7% financing and a DSCR below the 1.2× lender threshold. Sarah should negotiate to $260,000 or target a 25% down payment to improve the DSCR and CoC return.
Real Estate Metrics Reference Table
| Metric | Formula | Target | What It Tells You |
|---|---|---|---|
| Cap Rate | NOI ÷ Price | 5–8%+ | Unleveraged yield; compare markets |
| Cash-on-Cash | Cash flow ÷ Cash invested | 6–10%+ | Return on your equity capital |
| NOI | Revenue − Operating expenses | Positive | Pre-financing income |
| DSCR | NOI ÷ Debt service | ≥1.2× | Lender qualification ratio |
| GRM | Price ÷ Gross annual rent | <10–12 | Quick price-to-rent check |
Key Concepts: DSCR, Cap Rate, and the 1% Rule
DSCR (Debt Service Coverage Ratio) — NOI ÷ annual mortgage payment. Lenders require ≥1.2× for most investment property loans. Below 1.0 means the property's income doesn't cover its debt — a deal-killer for financing. A DSCR of 1.25 means every $1 of debt service is covered by $1.25 of NOI.
Cap Rate vs. Cash-on-Cash — Cap rate is financing-neutral (ignores the mortgage). Cash-on-cash includes debt service and measures return on your actual invested capital. A deal can have a high cap rate and negative cash flow if the mortgage rate exceeds the cap rate — called negative leverage.
The 1% Rule — Monthly rent ≥ 1% of purchase price. A $250,000 property should rent for $2,500/month. At 7% mortgage rates, this threshold is increasingly difficult to meet in most US markets; 0.8% is a more realistic current benchmark.
Negative leverage — When the cap rate is lower than the mortgage interest rate, adding debt reduces your cash-on-cash return. Example: 5.5% cap rate + 7% mortgage = negative leverage. More equity (larger down payment) or higher rents are needed to make the deal work.
Tips and Common Mistakes
- Using gross rent in cap rate calculations — Cap rate uses NOI, not gross rent. Using gross rent overstates the cap rate by 30–50%. Always subtract vacancy and operating expenses first.
- Ignoring DSCR before negotiating price — If a deal's DSCR is below 1.2, most lenders won't finance it as an investment property. Check DSCR before falling in love with a deal.
- Forgetting property management fees — Even if you self-manage, model 8–10% management fees. If you ever need to hire a manager (travel, growth, illness), the deal must still work.
- Treating appreciation as income — Appreciation is speculative and location-dependent. Underwrite deals on cash flow and cap rate. Appreciation is upside, not the base case.
- Comparing cap rates across market types — A 6% cap rate in a C-class rural market carries very different risk than a 6% cap rate in a suburban A-class market. Risk-adjust your target cap rate by market and asset quality.
Frequently Asked Questions
What is a good cap rate for real estate?
5–7% is typical for single-family and small multifamily in moderate markets. High-demand urban markets often trade at 3–5%. Rural or distressed markets may see 8–12%. Compare cap rates within a local market, not nationally.
What DSCR do lenders require for investment property?
Most conventional and portfolio lenders require DSCR ≥ 1.2×. Some DSCR loan programs lend down to 1.0×. Below 1.0 means the property's income doesn't cover the mortgage — most lenders will not fund this.
How is NOI different from cash flow?
NOI = revenue minus operating expenses, before any mortgage payments. Cash flow = NOI minus mortgage payments. NOI is financing-neutral; cash flow is specific to your financing terms.
What is the gross rent multiplier (GRM)?
GRM = purchase price ÷ annual gross rent. A GRM of 10 means you're paying 10 years of gross rent. Lower is better. GRM is a quick screen — it ignores expenses and financing, so it's only a starting filter, not a final metric.
What is negative leverage in real estate?
When the mortgage interest rate exceeds the property's cap rate, adding debt reduces your overall return. This is called negative leverage. It's common when rates are high and cap rates compressed. The fix: larger down payment, lower price, or higher rents.
How do I calculate cash-on-cash return?
Annual cash flow (after all expenses and mortgage payments) ÷ total cash invested (down payment + closing costs + renovation). If you invested $70,000 and net $4,200/year in cash flow, your CoC return is 6%.
What related tools should I use?
Use the rental property calculator for deeper single-property analysis, the mortgage calculator for payment details, or the down payment calculator to model your capital allocation.