Start by entering the purchase price, your down payment, loan interest rate, and loan term. Then add the expected monthly gross rental income and fill in your operating expenses: property taxes, insurance, management fee, maintenance reserve, and vacancy rate. The calculator updates all metrics instantly as you type.

Net Operating Income (NOI) is your gross rental income minus all operating expenses, before mortgage payments. It is the foundation of every other metric — cap rate, DSCR, and property valuation all derive from NOI. A healthy NOI means the property covers its costs before debt service.

Cap rate equals NOI divided by the purchase price, expressed as a percentage. In primary markets such as New York or Los Angeles, cap rates of 3–5% are typical. In secondary and tertiary markets, 6–10% is common. A higher cap rate signals stronger yield but often reflects a higher-risk location or asset class.

DSCR (Debt Service Coverage Ratio) measures how much NOI covers your annual mortgage payment. Most lenders require a DSCR of at least 1.25 before approving a rental property loan. A DSCR below 1.0 means the property cash flows negative — the rental income alone does not cover the mortgage.

IRR (Internal Rate of Return) accounts for the full holding period: annual cash flows, mortgage paydown, and sale proceeds at exit. Unlike cap rate, which is a one-year snapshot, IRR is the annualized total return over your entire investment horizon. Most residential rental investors target an IRR of 12–20% over a 5–10 year hold.