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Long-Term Rental Calculator

See a rental's cash flow, cap rate, cash-on-cash return, and IRR over your full holding period, including utilities and every operating cost.

By Drew Budwin · Last updated July 2026 · Methodology

Purchase & Financing

What the home is worth once repairs are done. Appreciation grows from this figure; leave blank to use the purchase price.

Rental Income

Operating Expenses

Growth & Sale Assumptions

Renting by the night instead? Use the Short-Term Rental Calculator, which models nightly rate and occupancy with platform, cleaning, and furnishing costs. Financing the purchase? See the Mortgage Calculator.

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How We Calculate This

Cash Flow

Each year starts from your scheduled rent, subtracts vacancy to get effective income, then subtracts operating expenses (management, property tax, insurance, HOA, maintenance, utilities, and anything else) to reach net operating income (NOI). Cash flow is NOI minus your annual mortgage principal and interest. Income and expenses grow each year at the rates you set.

Cap Rate & Cash-on-Cash

Cap rate is first-year NOI divided by the purchase price, a financing-independent yield. Cash-on-cash return is first-year cash flow divided by the actual cash you put in (down payment plus closing and repair costs).

IRR & Total Profit

This projects each year's cash flow, then a sale at the end of your holding period: the appreciated value minus selling costs and the remaining loan payoff. Total profit sums your cash flow and net sale proceeds minus cash invested. IRR is the annualized return that accounts for the timing of every cash flow and the sale.

Long-Term Rental Calculator Formula

Net operating income for a year:

NOI = Effective Gross Income − Operating Expenses

where effective gross income is scheduled rent minus vacancy, and operating expenses exclude mortgage principal and interest.

Capitalization rate:

Cap Rate = Year-1 NOI ÷ Purchase Price

expressed as a percentage.

Cash-on-cash return:

Cash-on-Cash = Year-1 Cash Flow ÷ Total Cash Invested

where total cash invested is down payment plus closing and repair costs.

How to Use This Calculator

  1. Enter the Purchase Price and your Down Payment (dollars or percent).
  2. Add the Loan Term and Interest Rate (leave the rate blank for an all-cash purchase).
  3. Enter the Monthly Rent and your Vacancy and Management rates.
  4. Fill in operating costs: property tax, insurance, HOA, maintenance, and utilities (itemize them if you like).
  5. Set your growth, appreciation, holding period, and cost to sell assumptions.
  6. Click Calculate to see cash flow, cap rate, cash-on-cash, IRR, and a year-by-year projection.

Frequently Asked Questions

What is a good cap rate for a rental property?

It depends on the market and property type, but many long-term rental investors look for a cap rate in the 5%–10% range. Higher cap rates often signal higher risk or lower-growth areas. Lower cap rates are common in high-demand markets where appreciation drives returns. Cap rate is only one measure, so compare it alongside cash-on-cash return and IRR.

What's the difference between cap rate and cash-on-cash return?

Cap rate is first-year net operating income divided by the purchase price and ignores financing, so it measures the property itself. Cash-on-cash return divides first-year cash flow (after the mortgage) by the actual cash you invested, so it reflects how financing affects your return. A financed property can have a modest cap rate but a much higher (or negative) cash-on-cash return.

Should I include utilities as an expense?

Only if you pay them. In many long-term rentals the tenant pays utilities directly, in which case you can leave utilities at $0. If you cover any utilities (water, trash, or a shared meter, for example), enter your monthly cost, or itemize electricity, water/sewer, gas, internet/cable, and trash for a more precise picture.

How is IRR calculated for a rental?

IRR (internal rate of return) is the single annual rate that makes the present value of every cash flow (your upfront investment, each year's cash flow, and the net proceeds when you sell) equal zero. It captures both the timing of cash flows and the gain at sale, which is why it's a more complete return measure than cap rate or first-year cash-on-cash.

What's the difference between cash-on-cash return and IRR?

Cash-on-cash return is one year's cash flow divided by the cash you invested, so it measures near-term income yield and ignores appreciation and the sale. IRR is the annualized return across the whole hold, folding in every year's cash flow and the net proceeds at sale, weighted by when each dollar lands. A property can post a modest first-year cash-on-cash yet a strong IRR when appreciation and loan paydown build equity you capture when you sell.

What is total return, and how is it different from IRR?

Total return is your total profit over the hold divided by the cash you invested. It tells you how many times you grew your cash, but it ignores how long that took. IRR annualizes the same gain, so a 600% total return over 12 years and the same figure over three years are very different yearly rates. Read them together: total return for the absolute multiple, IRR for the annual rate.

What is after-repair value, and when should I set it?

After-repair value is what the property is worth once your upfront repairs are done. Set it when you buy below market and improve the property, so appreciation compounds from the improved value instead of the purchase price. Leave it blank and the calculator uses the purchase price. It changes projected value, equity, and sale proceeds, but not the cap rate or the cash you invest.

What vacancy rate should I use?

A common planning assumption is 5%–8%, meaning the property sits empty roughly that share of the year between tenants. Use a higher rate in softer rental markets or for higher-turnover properties. Vacancy reduces your effective rental income before expenses.

Does this calculator account for taxes and depreciation?

No. This calculator models pre-tax cash flow and returns. It does not include income tax, depreciation, or their effects (such as depreciation recapture at sale). Consult a tax professional to understand how your specific situation affects after-tax returns.

Further Reading

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