Run the numbers on any investment property before you commit capital. Enter purchase price, rehab costs, rental income, and financing terms to see cash-on-cash return, cap rate, net operating income, and an overall deal grade — all updated in real time. Toggle between buy-and-hold and BRRRR modes to model how much capital you can recycle after refinancing.
Pro tip: Use the 1% rule as a quick screen — monthly rent should be at least 1% of the purchase price. Then run the full analysis here to see if the deal actually pencils out after financing, vacancy, and operating expenses.
| Year | Property Value | Loan Balance | Equity | Annual NOI | Cash Flow | Cumulative Return |
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How to Use the Investment Property Analyzer
Start by entering the purchase price of the property you are evaluating. Add rehab costs if you plan any renovations, then enter the after-repair value (ARV) — your best estimate of what the property will be worth once improvements are complete. Next, input your expected monthly rental income based on comparable rents in the area. Set a realistic vacancy rate, typically between 5% and 10% for stable markets, and enter your total monthly operating expenses excluding mortgage payments. Finally, dial in your financing terms: down payment percentage, interest rate, and loan term. Every metric updates instantly as you adjust inputs, so you can stress-test a deal by sliding vacancy up or tweaking the purchase price until the numbers work.
Understanding Cash-on-Cash Return vs Cap Rate
These two metrics answer different questions and serve different purposes. Cap rate (capitalization rate) measures the return on a property independent of how it is financed. It is calculated as annual net operating income divided by the property value. Cap rate lets you compare deals on a level playing field — a 7% cap rate property in Memphis can be directly compared to a 5% cap rate property in Denver regardless of loan terms. Cash-on-cash return, on the other hand, measures the return on your actual cash invested. It accounts for leverage: the down payment, closing costs, and rehab spending you put in. A property with a modest 5% cap rate can deliver a 12%+ cash-on-cash return with favorable financing because leverage amplifies returns. Experienced investors track both numbers — cap rate to evaluate the asset, cash-on-cash to evaluate the deal.
The BRRRR Strategy Explained
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy works by purchasing undervalued properties, renovating them to increase value, renting them out, then refinancing at the new higher appraised value. If the after-repair value is high enough relative to your all-in cost, the refinance can return most or all of your original capital. That recycled capital goes into the next deal, allowing investors to scale a portfolio without needing fresh capital for every purchase. The key metric in BRRRR is the capital recycled percentage — ideally 100% or higher, meaning you pull all your money back out while keeping a cash-flowing asset. This tool models the entire refinance scenario at 75% LTV so you can see exactly how much capital stays trapped in the deal before you commit.
Why Vacancy Rate Matters More Than You Think
New investors consistently underestimate vacancy. Even in strong rental markets, turnover between tenants creates gaps: cleaning, repairs, listing, showing, screening, and lease signing can easily consume four to six weeks. A single extended vacancy in a year can erase two or three months of positive cash flow. The vacancy rate input in this tool reduces your effective gross income before any other calculation, so it directly impacts NOI, cap rate, and cash-on-cash return. Conservative investors model 8–10% vacancy even in tight markets. If you are investing in a college town with seasonal demand or a market with high renter turnover, 12–15% is more realistic. Run the analysis at multiple vacancy assumptions to see how sensitive your returns are to empty months.
The 1% Rule and Other Quick Screening Tests
The 1% rule states that a rental property’s monthly rent should equal at least 1% of the purchase price. A $200,000 property should rent for at least $2,000 per month. This is a screening heuristic, not a final analysis — it filters out obviously bad deals before you invest time in detailed underwriting. The gross rent multiplier (GRM) is the inverse: purchase price divided by annual rent. A GRM below 10 generally indicates a property worth analyzing further. Neither metric accounts for operating expenses, vacancy, or financing, which is why you need a tool like this one to run the complete picture. Properties that pass the 1% rule can still be poor investments if operating costs are high, and properties that fail it can work in markets with strong appreciation.
Building a 10-Year Investment Thesis
Real estate returns compound over time through four channels: cash flow, principal paydown, appreciation, and tax benefits. Year one cash flow might be modest, but by year five the loan balance has decreased, rents have grown with inflation, and the property has appreciated. The 10-year projection table in this tool models all four drivers year by year so you can see how total equity builds over time. Many deals that look marginal in year one become excellent by year five once principal paydown and appreciation are factored in. This long-term perspective is what separates investors who build lasting wealth from those who chase the highest day-one cash flow. Use the appreciation rate input to stress-test different scenarios — even a 2% annual appreciation rate compounds meaningfully over a decade.
Looking for related tools? Try our Rental Profit Calculator for short-term rental analysis, our Mortgage Calculator for payment details, or explore all Home & Real Estate tools.