Rental Property Calculator

A cap rate of 5% to 10% is generally considered good, though it varies by market. Urban areas with high demand may have lower cap rates (4%–6%) but offer better appreciation. Higher cap rates (8%–10%) often mean more risk or less desirable locations.

The 1% rule says a rental property should generate monthly rent of at least 1% of the purchase price. A $300,000 property should rent for at least $3,000 per month. It is a quick screening tool but should not replace full financial analysis.

Budget 1% to 2% of the property value per year for maintenance and repairs. For a $300,000 property, that is $3,000 to $6,000 annually. Older homes may require more. The "50% rule" suggests half of gross rent goes to expenses (not including the mortgage).

A 5% to 8% vacancy rate is common for residential properties in stable markets. This accounts for tenant turnover, advertising time, and the occasional month without rent. In less desirable areas, assume 10% or higher.

Yes. Most lenders require 20% to 25% down for investment properties, compared to 3% to 20% for primary residences. Interest rates are also typically 0.5% to 0.75% higher. You will also need cash reserves of 3 to 6 months of payments.