Rental Income Calculator
This multi-method rental income calculator estimates Net Operating Income (NOI), capitalization rate, cash-on-cash return, and an illustrative after-tax cash flow. It is intended for planning and comparison of rental investments.
Results are based on user-provided inputs and standard financial formulas. Use values that match your local market and consult professionals for underwriting, tax, and legal advice.
Compute effective gross income, operating expenses, Net Operating Income (NOI), annual mortgage payments and net annual cash flow.
Inputs
Results
Net Operating Income (NOI)
$11,400.00
Annual mortgage payment
-$30.00
Annual cash flow (before tax)
$11,430.00
| Output | Value | Unit |
|---|---|---|
| Net Operating Income (NOI) | $11,400.00 | currency |
| Annual mortgage payment | -$30.00 | currency |
| Annual cash flow (before tax) | $11,430.00 | currency |
Visualization
Methodology
Calculations follow common real-estate finance conventions: gross rent less vacancy yields effective gross income; NOI equals effective gross income minus recurring operating expenses; cap rate is NOI divided by purchase price; cash-on-cash compares pre-tax cash flow to initial cash invested.
Mortgage payments use the standard fixed-rate annuity formula for level payments. Tax estimates are intentionally simplified: they do not replace tax professional calculations and use the marginal tax rate provided by the user.
Worked examples
Example: $2,000 monthly rent, $0 other income, 5% vacancy, $5,000 operating expenses, $240,000 loan at 4.5% → NOI and annual cash flow are computed to assess both cap rate and cash-on-cash return.
Example: When loan_amount = 0 (cash purchase), annual mortgage payment is treated as zero and cash-on-cash is annual cash flow divided by cash invested.
Key takeaways
Use NOI and cap rate to compare asset value and market yields.
Use cash-on-cash to evaluate short-term liquidity returns on invested equity.
After-tax estimates are illustrative only; they rely on simplified assumptions about interest and depreciation.
Further resources
External guidance
Expert Q&A
Is this calculator a substitute for professional underwriting?
No. This tool provides illustrative estimates. Use it for initial screening. For financing, tax, or legal decisions, consult a licensed professional and request full amortization schedules and tax computation.
How accurate are mortgage payment calculations?
Mortgage payments are calculated with the standard fixed-rate annuity formula. Rounding and input precision affect cents-level accuracy; amortization schedules and escrow payments are not included.
How does the tool handle taxes?
Tax computations are simplified and illustrative. The tool applies a user-provided marginal tax rate to a simplified taxable income estimate. It does not account for itemized deductions, passive activity loss rules, local taxes, or tax credits.
What if I enter zero or missing values?
Zero loan amount is treated as an all-cash purchase and sets mortgage payments to zero. Missing fields should be completed to obtain meaningful results. Division-by-zero safeguards return zero where appropriate.
Sources & citations
- National Institute of Standards and Technology (data integrity & best practices) — https://www.nist.gov
- International Organization for Standardization (numeric and documentation standards) — https://www.iso.org
- IEEE (engineering and numeric computation best practices) — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — guidance for safe workplace practices — https://www.osha.gov