How to Analyze a Rental Property A Practical Template

Use our simple template to run the numbers on any rental property. We'll show you what to look for and what numbers really matter.

Phase 3: Practical Execution · 10 min read

📋 The One‑Page Rental Analysis

Every great real estate investor uses a consistent method to evaluate deals. This template walks you through the key numbers: income, expenses, cash flow, and returns. Once you master it, you can analyze any property in 15 minutes.

1. Income

Gross rental income – include rent, laundry, storage, parking. Use market rents, not seller's claims.

2. Vacancy

Subtract a vacancy allowance (5–10% of gross income). This cushions against lost rent.

3. Operating Expenses

Property taxes, insurance, maintenance (1% of value/year), property management (8–10%), utilities, HOA, reserves.

4. Net Operating Income (NOI)

Gross income – vacancy – operating expenses. This is the property's profit before debt service.

5. Cash Flow & Returns

Subtract mortgage payment from NOI to get monthly cash flow. Then calculate cap rate (NOI/price) and cash‑on‑cash ROI (annual cash flow / down payment).

The 1% Rule and 50% Rule

1% Rule: Monthly rent should be at least 1% of purchase price. Quick screen, not a guarantee.

50% Rule: Operating expenses (excluding mortgage) will be about 50% of gross income. Helps estimate cash flow quickly.

Example: $200,000 property, $2,000/month rent → passes 1% rule. Expenses ~$1,000/month (50% rule), mortgage ~$900 → cash flow $100/month. Use the template below for precise numbers.

Interactive: Rental Property Analysis Template

Fill in the numbers below to calculate NOI, cap rate, cash flow, and ROI.

Adjust the values and click the button.

This template uses standard formulas. Adjust percentages to match your market. Always verify numbers with actual data and consult a professional.

📝 Test Your Knowledge: Rental Property Analysis

1. What does NOI stand for?
Net Operating Interest
Net Operating Income
New Owner Investment
National Occupancy Index
2. The 1% rule states that monthly rent should be at least what percentage of the purchase price?
0.5%
1%
2%
5%
3. Which of the following is NOT typically subtracted before calculating NOI?
Property taxes
Insurance
Mortgage payments
Maintenance
4. If a property costs $250,000 and generates $2,000/month rent, what is its gross rent multiplier (GRM)?
125
10.4
8.3
0.008
5. Cash‑on‑cash return measures:
Return on total property value
Return on the actual cash invested (down payment)
Return after selling
Annual appreciation

📘 Complete Phase 3: Practical Execution