Monthly cash flow
Add a rate
Enter an interest rate to include the loan payment. Before financing, the property nets $6,281 a month.
- Cap rate
- 4.71%
- Cash-on-cash return
- —
- Debt coverage (DSCR)
- —
- Gross rent multiplier
- 13.9
Net operating income as a share of the price. Ignores financing.
Yearly cash flow as a share of the cash you put in.
Net operating income divided by the loan payments. Lenders look for this.
Price divided by a year of rent. A quick comparison between buildings.
| Rent and other income | $9,600 |
|---|---|
| Property tax | −$1,467 |
| Insurance | −$400 |
| Utilities | −$300 |
| Repairs and reserves | −$768 |
| Vacancy allowance | −$384 |
- Cash needed at purchase
- $512,000
- Net operating income
- $75,376/yr
- Loan payment
- Add a rate
For estimates only. These results are not a loan offer, rate quote, or investment advice. Actual loan rates, terms, and down payments depend on the lender and the borrower, and actual rents and expenses vary by property. Verify every figure before you buy, and see what to check first on the investment property page.
Reading the Results
What is a good cap rate?
It depends on the market. On the Orange County coast, high land values keep cap rates lower than in most inland markets, so investors there often accept a lower return today in exchange for long-term growth. Compare a property with similar buildings nearby rather than with a national rule of thumb.
Why is the property tax based on the purchase price?
In California, Proposition 13 resets a property’s assessed value to the purchase price when it sells. The seller’s current tax bill is usually lower than yours will be, so always calculate from your own price. Local assessments can add to the base rate.
What does debt coverage (DSCR) tell me?
It compares the property’s net operating income with the loan payments. Above 1.0 means the income covers the debt. Many lenders that underwrite on the property’s income look for a minimum ratio, so a low number can limit how much you can borrow.
Can cash flow be negative and still be a good investment?
Sometimes. On the coast, many buyers accept little or negative cash flow in the early years in exchange for land value, appreciation, and principal paydown. Whether that works depends on your goals, your reserves, and how long you plan to hold.