Stop guessing and start calculating. Learn the three essential metrics every real estate investor uses to analyze deals and compare properties.
Whether you're looking at a duplex or a 20‑unit apartment building, the numbers tell the story. Cap rate, cash flow, and ROI are the three pillars of property evaluation. Master them, and you'll never overpay for an investment again.
Net Operating Income (NOI) ÷ Property Value
Measures the unleveraged return of a property. A higher cap rate means higher risk and potentially higher return. Useful for comparing properties regardless of financing.
Rental Income – All Expenses (including mortgage)
The money left in your pocket each month. Positive cash flow = passive income. Negative cash flow = you're subsidizing the tenant.
Annual Return ÷ Total Cash Invested
Also called cash‑on‑cash return. Shows how efficiently your money is working. A 10% ROI means you earn $10 for every $100 invested.
Cap Rate ignores financing – it's the property's raw earning power. Cash flow depends on your loan terms – a great deal can turn bad with high interest. ROI tells you how fast you get your money back. Use all three together.
Example: A $200,000 property with $20,000 NOI has a 10% cap rate. With 20% down ($40,000) and a mortgage, monthly cash flow might be $300, giving an ROI of ($3,600 / $40,000) = 9%.
Enter the details below to calculate cap rate, monthly cash flow, and ROI.
Adjust the values and click the button.
This calculator uses standard formulas: NOI = (rent × 12 × (1‑vacancy)) – (tax + insurance + maintenance + other). Cash flow = NOI – mortgage payments. ROI = (annual cash flow / total cash invested) × 100%. Cap rate = NOI / purchase price.