Rental Property ROI Calculator

Rental Property Analysis: The Numbers That Matter

There are four metrics every real estate investor needs to calculate before buying: cash-on-cash return, cap rate, gross rent multiplier, and cash flow. Most amateur investors only look at one. Running all four takes 10 minutes and can save you from a money-losing property.

The 1% Rule (and Why It’s a Starting Point, Not a Decision)

The 1% rule says monthly rent should be at least 1% of purchase price. A $300,000 property should rent for $3,000/month minimum. In 2026’s market, the 1% rule is nearly impossible to hit in most primary markets (Atlanta, Austin, Denver) but achievable in secondary markets (Cleveland, Dayton, Memphis). Use it as an initial filter — properties that fail the 1% rule need strong appreciation expectations to pencil out.

Investment Property Financing in 2026

Investment property mortgage rates run 0.5%–1.0% higher than primary residence rates. At current rates, expect 7.0%–8.0% on a 30-year investment property loan with 20%–25% down. Fannie Mae allows up to 10 financed properties — strategy investors often max this before turning to portfolio lenders.

Depreciation: The Tax Advantage of Real Estate

Residential rental properties are depreciated over 27.5 years. A $350,000 property (minus land value of ~$70,000) = $280,000 depreciable basis ÷ 27.5 years = $10,182/year in depreciation deduction. At the 22% tax bracket, that’s $2,240/year in tax savings. This is why real estate investors often show paper losses while collecting positive cash flow — depreciation is a non-cash deduction.