Rental Property Cash Flow & Cap Rate Calculator

Cap rate and cash flow from the same six inputs

A $320,000 property renting for $2,400/month, with 5% vacancy and $650/month in operating expenses, produces annual NOI of $19,560 and a cap rate of 6.11% -- NOI divided by purchase price, the standard unlevered yield used to compare properties regardless of how they're financed.

Layer in financing -- $64,000 down and a $1,650 monthly PITI payment -- and monthly cash flow comes out to -$20, with cash-on-cash return of -0.38%. That's the number that actually matters if you're financing the deal: a positive cap rate can still mean the property loses money every month once the loan payment is subtracted.

This gap between cap rate and cash-on-cash is the most common trap in rental math -- a property can look attractive unlevered and still be a monthly loss once a mortgage payment is added, exactly as this example shows.

What counts as NOI here, and what's estimated

NOI is calculated as annual rent adjusted for vacancy, minus annual operating expenses -- it deliberately excludes the mortgage payment (PITI), since cap rate is meant to measure the property independent of financing.

Planning model. Vacancy and capex are estimates, not an appraisal. Actual operating expenses (repairs, capex reserves, property management) are frequently underestimated by new investors; if your $650/month figure doesn't include a capex reserve, treat this cash-flow number as optimistic.

Purchase price must be greater than zero for cap rate to compute; every other field can be adjusted to stress-test the deal, including running vacancy up to 10-15% to see how sensitive the cash flow line is.

Comparing this deal to other places to put the down payment

A -0.38% cash-on-cash return means the $64,000 down payment isn't earning anything at this rent and expense level -- compare that opportunity cost against a simple savings vehicle on the High-Yield Savings APY Comparator.

If this is a short-term or seasonal rental rather than a long-term lease, the Vacation Rental Break-Even Calculator models occupancy-rate risk instead of a flat vacancy percentage.

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