Rental Property Calculator = Positive Cap Rate
When working with investors I often get sent properties and asked – “Is this property a good deal?” “Will my rental property be profitable?” I built this rental property calculator to help you have a better understanding and the data necessary to answer those questions. You can also use this calculator to dial in your price range given the additional costs associated with owning/managing a property.
You’ll need a bit of data to get started. The more “firmed up” the numbers to more accurate your data will be – or just estimate – it’s all about education. You’ll also need to know what a cap rate is.
What’s a cap rate – and – What’s a good cap rate for rental property?
A capitalization rate, or cap rate, is a way to breakdown all of the income and expenses of investment property into one number. The formula is (Net Operating Income / Current Market Value) x 100 = Cap Rate. Again, don’t gloss over, we’ll crunch the numbers below.
When it comes to cap rates, the higher the better! A “good” cap rate is between 5% and 10%. Generally, higher priced properties in cities will have lower cap rates and lower priced suburban properties or even hotels will have higher cap rates. If you’re hitting a cap rate close to 10%, you’re doing well!
The form below is fully editable and it crunches the numbers live. You can send the information to yourself in an email, too. Don’t worry, we won’t spam you.
If you found this rental property calculator useful, check out our Learning Center for more useful topics!