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Investor-Grade Metrics

Rental Property ROI Calculator — Cap Rate, Cash-on-Cash & Yield

Enter your property numbers once and get every metric a real estate investor actually checks — gross yield, cap rate, cash-on-cash return, monthly cash flow, and break-even occupancy — each with a plain-English definition.

🏠 Property & Financing

Purchase
Income
Annual Operating Expenses

📊 Investment Metrics

Enter your property details and click Calculate
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Disclaimer: This calculator is for educational purposes only and does not constitute investment advice. It assumes constant rent, expenses, and occupancy, and does not account for appreciation, major repairs, or tax deductions beyond what you enter. Consult a licensed financial or real estate advisor before investing.

Every Metric, Clearly Defined

Gross Rental Yield — annual rent as a percentage of purchase price, before any expenses. The simplest, least accurate measure: Annual Rent ÷ Purchase Price × 100.

Cap Rate (Capitalization Rate) — Net Operating Income (rent after vacancy and operating expenses, but before mortgage payments) as a percentage of purchase price. This is the standard way investors compare properties independent of how they're financed: NOI ÷ Purchase Price × 100.

Cash-on-Cash Return — your actual pre-tax cash flow (after mortgage payments) as a percentage of the actual cash you put in (down payment). This reflects leverage — financing changes this number even though it doesn't change the cap rate: Annual Cash Flow ÷ Cash Invested × 100.

Break-Even Occupancy — the minimum percentage of the year you need the property rented to cover every expense and mortgage payment: (Operating Expenses + Annual Debt Service) ÷ Gross Potential Rent × 100.

Why Cap Rate and Cash-on-Cash Return Can Tell Different Stories

Cap rate looks at the property as if you paid cash — it never changes based on your loan. Cash-on-cash return looks at your actual money at risk — a bigger loan means less cash invested, which can push your cash-on-cash return higher or lower than the cap rate depending on whether your loan rate is cheaper or more expensive than the property's unlevered return. Comparing both numbers tells you whether leverage is helping or hurting this specific deal.

Frequently Asked Questions

Gross rental yield divides annual rent by purchase price, ignoring expenses. Cap rate divides Net Operating Income (rent minus operating expenses, before any mortgage payment) by purchase price. Cap rate is a much more realistic measure of a property's earning power because it accounts for real costs.
Cash-on-cash return measures your annual pre-tax cash flow (after mortgage payments) against the actual cash you invested (down payment plus costs) — not the full property price. It reflects the effect of leverage: financing a property with a mortgage can raise or lower your cash-on-cash return compared to its cap rate, depending on your loan terms.
Break-even occupancy is the minimum percentage of the year your property must be rented to cover all operating expenses and mortgage payments. If your break-even occupancy is 70%, you can afford roughly 3.5 months of vacancy a year before the property starts losing money.
This varies heavily by market and property type — there's no universal number. Investors commonly look for cap rates in the mid-single digits or higher for residential rentals, and cash-on-cash returns of 8% or higher, but local market norms, growth potential, and risk should weigh more than any fixed benchmark.