ARDOTOOLS

Rental Property Analyzer

Quickly estimate annual rental cash flow, cap rate, and cash-on-cash return.

Inputs

Result

Planning estimate only. Replace assumptions with your real costs, contracts, taxes, and market conditions.

How it works

  1. Enter the purchase and the rent

    The price, your down payment and the rent you can realistically charge.

  2. Be honest about vacancy and upkeep

    A unit is not let 100% of the time, and maintenance is not zero.

  3. Read cash flow, cap rate and cash-on-cash

    Three different questions: does it pay monthly, is the asset priced well, is your deposit working.

Who this is for

Screening a listing

Rule out the obvious no before booking a viewing.

Comparing two properties

Cap rate compares assets; cash-on-cash compares what your own money earns.

Stress-testing

Raise vacancy, raise the interest, and see whether it still works.

Reviewing what you own

Rents and costs move. A property that worked at purchase may not now.

Questions

What vacancy rate should I assume?
Five to eight percent is a common planning figure for a stable long-let market, but it is local. One month empty a year is roughly 8%. Short lets run far higher.
What is the difference between cap rate and cash-on-cash?
Cap rate is net operating income over the purchase price and ignores your mortgage, so it compares properties. Cash-on-cash is annual cash flow over the cash you actually put in, so it compares your money's options.
Why is my cash flow negative?
Usually because operating costs and debt service together exceed the rent. That is not automatically a bad deal if you are buying for appreciation, but it should be a decision rather than a surprise.
Does this include tax or depreciation?
No. It stops at pre-tax cash flow. Tax treatment of rental income varies enough by country and by owner that any figure here would be wrong for most people.