Rental property analyzer
Run a single property through the standard FI-community heuristics. Defaults assume a 25% down conventional loan with realistic vacancy + capex + management reserves.
Monthly cash flow
$-177
$-2,129/yr
Cap rate
5.38%
NOI / price
Cash-on-cash return
-2.2%
on $98,000 invested
1% rule
fails
Rent / Price = 0.80% (target: ≥ 1.00%)
50% rule (operating expenses excl. mortgage)
PASSES
44% of gross rent (target: ≤ 50%)
Monthly cost breakdown
Mortgage P&I: $1,746
Property tax: $350
Insurance: $125
HOA: $0
Vacancy reserve: $224
Capex reserve: $280
Management: $252
Total: $2,977
Educational estimate; doesn't include depreciation deductions, tax effects, or future rent growth. Cash flow figures assume a stabilized property with the listed reserves actually held back.
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FAQ
- What's the 1% rule?
- A quick screening heuristic: monthly rent should be ≥ 1% of purchase price to be worth analyzing. A $300k house should rent for $3,000/mo. The rule is rare in coastal markets and common in the Midwest. Failing it doesn't kill a deal but raises the bar.
- What's the 50% rule?
- Operating expenses (everything except mortgage P&I) average ~50% of gross rent over time. Includes vacancy, maintenance, capex, taxes, insurance, management. New landlords almost always understate this — actual expenses tend toward the rule even when projections look better.
- What's a "good" cash-on-cash return?
- FI-community target: 8-12% cash-on-cash. Below 5% the deal usually doesn't justify the work + risk vs index funds. Above 15% something is probably wrong with the projection.
- What about depreciation?
- Residential rentals depreciate over 27.5 years. On a $300k building basis (excluding land), that's ~$11k/yr of paper deductions. For high earners not REPS-qualified, the depreciation is suspended at $100k+ MAGI but releases on sale.
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Educational guidance only. Not legal, tax, or individualized investment advice. We do not recommend individual securities or guarantee outcomes.