Analyze rental property income, expenses, cash flow, cap rate, and cash-on-cash return.
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The Chen family is buying a $340,000 home in Columbus, Ohio. Combined income $115,000, 10% down payment, 30-year fixed at 7.125%.
Takeaway: Columbus/Franklin County averages are the reference baseline. Property tax rates and insurance premiums shift significantly by ZIP code and HOA status. Plug your actual numbers in above.
We default to state-average millage rates. County and municipal rates vary 40%+ within a single state. Ohio ranges from 0.8% (rural counties) to 2.4% (Cuyahoga/Cleveland area). Always cross-check your specific county assessor's published effective rate.
Property Tax by StateHomeowner association fees add $100-$800/month in condos and planned communities. Condos in urban markets often run $400-$700/month. If your property has HOA, add it manually to any payment estimate — it directly affects your debt-to-income ratio for loan qualification.
HOA Fee CalculatorClosing costs typically run 2-5% of the loan amount — around $6,000-$15,000 on a $300K home. Lender fees, title insurance, escrow, and prepaid taxes add up fast. These are due at closing in cash, not rolled into the mortgage by default.
Closing Costs CalculatorPrivate mortgage insurance (PMI) costs 0.5-1.5% of the loan annually until you reach 20% equity. On a $300K loan at 1%, that's $250/month. PMI cancels automatically at 78% LTV under federal law — but you can request removal at 80%.
National home price appreciation has averaged ~4% annually since 1968, but markets diverge dramatically. Sun Belt metros averaged 10%+ during 2020-2022; coastal markets often lag the national average during correction cycles. Local supply constraints are the main driver.
If you've lived in the home 2 of the last 5 years, you can exclude $250K (single) or $500K (married) of gain from federal capital gains tax. Many calculators show gross profit without applying this exclusion. Relevant when projecting sale proceeds.
Home Sale Capital Gains CalculatorBased on your inputs
3.36% cash-on-cash return
| Gross Annual Rent | $24,000 |
|---|---|
| Vacancy Loss | -$1,920 |
| Effective Gross Income | $22,080 |
| Operating Expenses | -$6,000 |
| Net Operating Income (NOI) | $16,080 |
| Annual Cash Flow | $1,680 |
| Monthly Cash Flow | $140 |
| Cash-on-Cash Return | 3.36% |
| Cap Rate | 6.43% |
| Gross Yield | 9.60% |
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Most investors target 8–12% cash-on-cash return. Anything above 8% is generally considered good in most markets. High-cost areas may yield 4–6%.
NOI = Gross Rental Income − Operating Expenses (before mortgage). It measures property income independent of financing.
Property tax, insurance, maintenance (1% of value/year), vacancy (5–10%), property management (8–12%), repairs, and capital expenditures.
Monthly rent should be at least 1% of purchase price. A $200,000 property should rent for $2,000/month. Markets vary — coastal cities rarely hit 1%.
Set rent at market rate by checking comparable listings on Zillow, Rentometer, and Craigslist within a half-mile radius. Price 3-5% below market for fast occupancy or at market rate if the property is updated. Overpricing causes costly vacancy.
Landlords can deduct mortgage interest, property taxes, insurance, repairs, maintenance, property management fees, travel to the property, depreciation, and professional services. Depreciation alone shelters $10,000-$15,000+ in annual income on typical rental properties.
Property managers charge 8-12% of monthly rent plus placement fees. Self-managing saves $2,000-$4,000 annually but requires handling tenant calls, maintenance, and legal compliance. Most investors self-manage under 4 units and hire managers for larger portfolios.
Budget 1-2% of property value annually for maintenance and repairs. A $250,000 property needs $2,500-$5,000 per year. Older properties and those with deferred maintenance may need 3-4%. Set aside reserves monthly to avoid cash flow surprises.
The 50% rule estimates that operating expenses (excluding mortgage) will consume about 50% of gross rent over time. If rent is $2,000/month, expect $1,000 in expenses. Use this as a quick screening tool before detailed analysis.
Run credit checks (minimum 620 score), verify income (require 3x monthly rent), check rental history with previous landlords, and perform background checks. Require pay stubs or tax returns as income proof. Consistent screening criteria protect against fair housing violations.
NOI = Effective Gross Income − Operating Expenses
Cash Flow = NOI − Debt Service
Cash-on-Cash = Annual Cash Flow / Cash Invested × 100
Every formula on this page traces to a federal agency, central bank, or peer-reviewed institution. We cite the rule-makers, not secondhand blogs.
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Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.