Rental Property ROI Calculator guide
Use this calculator as a first-pass investment screen. It separates operating performance from financing so owners can compare NOI, cap rate, debt coverage and cash-on-cash return without confusing one metric for another.
What this rental ROI calculator measures
The calculator estimates gross scheduled rent, vacancy-adjusted income, operating expenses, net operating income, annual debt service, pre-tax cash flow, cap rate, cash-on-cash return and debt-service coverage ratio. NOI excludes mortgage principal and interest because cap rate measures the property before financing. Cash-on-cash return then compares pre-tax cash flow with the cash invested.
How to use the result
Start with conservative rent and vacancy assumptions. Include recurring maintenance, taxes, insurance, management, HOA charges and reserves. Compare the result with actual leases, tax records, insurance quotes and a lender’s loan terms before making an acquisition decision.
Houston and Section 8 considerations
For Houston rentals, verify flood exposure, insurance deductibles, property-tax assumptions, utility responsibility and expected make-ready costs. For voucher properties, compare the proposed contract rent with payment standards, utility allowances and rent-reasonableness requirements rather than treating the payment standard as guaranteed rent.