Estimate your returns
Enter the purchase, rent, expenses, and loan terms. The tool returns net operating income, cap rate, cash-on-cash return, gross rent multiplier, and DSCR.
Enter your numbers to calculate.
Investor calculators
Rental Cap Rate and ROI Calculator
Estimate cap rate, cash-on-cash return, gross rent multiplier, and debt service coverage on a rental property, including financing and operating expenses. These are planning estimates for investors, not lending or investment advice.
Selling or buying soon
A calculator is a starting point. Get a full picture with a direct review of payoff, taxes, title, condition, and timing.
What the metrics mean
Cap rate is net operating income divided by price and ignores financing, so it compares properties on equal footing. Cash-on-cash measures the return on the actual cash you put in after the loan. DSCR is net operating income divided by debt service and is what many lenders use to size a loan. Read them together.
How to evaluate a rental property
Start with gross rent, subtract a vacancy allowance to get effective income, then subtract operating expenses such as taxes, insurance, maintenance, management, and other costs to get net operating income. Net operating income divided by the purchase price is the cap rate, a financing-neutral way to compare deals.
Financing then shapes the cash return. The loan payment is subtracted from net operating income to get cash flow, and cash flow divided by the cash you invested is the cash-on-cash return. Debt service coverage, which is net operating income divided by the annual loan payment, tells you how much cushion the income gives over the debt, and many lenders want it above a set threshold. Treat all of these as planning estimates and confirm rents, expenses, and loan terms before you buy.
Related calculators
Rental return FAQs
What is a good cap rate?
It depends on the market and the risk. Cap rate is net operating income divided by purchase price, so a higher cap rate means more income relative to price but often more risk or work. Compare similar properties in the same area rather than using a single target.
What is cash-on-cash return?
It is the annual cash flow after the loan payment divided by the cash you invested, including down payment, closing, and rehab. It measures the return on the money you actually put in, which cap rate does not because cap rate ignores financing.
What is DSCR and why do lenders use it?
Debt service coverage ratio is net operating income divided by the annual loan payment. It shows how much the income covers the debt. Many investment lenders want it above a threshold such as 1.2 to approve or size a loan.
Are these figures lending advice?
No. They are planning estimates that depend on accurate rents, expenses, and loan terms. Confirm market rent, real operating costs, and current loan pricing with the appropriate professionals before you buy.
This calculator is general information for Chicago-area owners, buyers, and investors. It is not legal, tax, lending, appraisal, or brokerage advice, and rates or rules can change. Verify figures with the appropriate professionals before money moves or documents are signed. Returns depend on accurate rents, expenses, and financing and are not lending or investment advice.