Tool · Profitability
Rental Property Profitability Calculator
In brief — Enter the price, rents and expenses: the tool computes the cap rate, cash flow, cash-on-cash return and gross rent multiplier. A vacancy and maintenance allowance is applied for a realistic return.
Cap rate
4.88 %
Annual cash flow
-$2,946
Cash-on-cash
-2.83 %
Gross rent multiplier
13.9
Verdict:Negotiate
Indicative estimate — not financial advice. Closing costs assumed at $4,000.
Net operating income (NOI) is gross rent minus operating expenses: municipal and school taxes, insurance, maintenance, management and a vacancy allowance. It excludes debt service.
The capitalization rate (cap rate) is NOI divided by purchase price: it measures the property's return independent of financing. Cash flow is NOI minus the annual mortgage payment. Cash-on-cash relates that cash flow to the money actually invested (down payment + closing costs).
The gross rent multiplier (GRM) is price divided by annual gross rent: the lower it is, the more affordable the property is relative to its income.
Full tax analysis (CCA, recapture, 10-year projection)
Analyze a property with DeedWorthFrequently asked questions
What is a good cap rate?
It depends on the market and risk, but a higher cap rate indicates a better operating return relative to price. Always compare it to similar properties in the same area.
How is cash flow calculated?
Cash flow is net operating income minus the annual mortgage payment. If positive, the property covers its costs after debt service.
What vacancy allowance should I use?
A 3–5% allowance on gross rent is prudent to account for vacant units and bad debt, depending on the rental market.
What is cash-on-cash return?
It is annual cash flow divided by the money actually invested (down payment and closing costs): it measures the return on your capital, not on the full price.
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