What's a good cap rate?

5–10% is common; lower in expensive markets, higher in riskier ones.

Should I include vacancy?

Yes — most investors budget 5–10% of rent for vacancy and add it to expenses.

5–10% is common; lower in expensive markets, higher in riskier ones.

Yes — most investors budget 5–10% of rent for vacancy and add it to expenses.

Mortgage & Real Estate

Analyze rental property cash flow, cap rate and cash-on-cash return.

Purchase Price

Down Payment

Mortgage Rate

Loan Term

Monthly Rent

Monthly Expenses

$$\text{NOI} = 12(R-E),\qquad \text{Cap} = \frac{\text{NOI}}{P},\qquad CF = R - E - M$$

Where

NOInet operating income

Rmonthly rent

Emonthly expenses

Mmortgage payment

Capcapitalization rate

CFcash flow

Ppurchase price