cap rate · cash-on-cash · 1% rule · 10-yr equity

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//// Financial · Real Estate

Real Estate Investment Calculator

Evaluate any rental property deal before you make an offer. Cap rate, cash-on-cash return, 1% rule check, break-even rent, monthly cash flow, and a 10-year equity projection — all in one place.

401(k) Limit 2024$23,000(+$7,500 catch-up 50+)

Roth IRA Limit$7,000(MAGI phase-out applies)

S&P 500 Avg Return~10%/yr(nominal, historical)

Property & Financing

Purchase price

Down payment= $50,000

Annual interest rate

Loan term

yrs

Monthly rent

Annual appreciationHistorical avg ~3–4%

Operating Expenses

Property tax= $250/mo

% / yr

Insurance

$/mo

Maintenance= $208/mo (1% rule)

% / yr

Property management= $176/mo

% of rent

Vacancy rate= $110/mo loss

1% Rule: 0.88% — Fails

Need $2500/mo minimum

-$42.76/mo cash flow

Break-even rent: $2,249/mo

Monthly Mortgage

$1,398

$50,000 down

Cap Rate

6.51%

NOI / purchase price

Cash-on-Cash

-1.03%

Annual CF / down payment

Year 10 Equity

$162K

+$107,258 total return

Monthly Breakdown

Rent income+$2,200

Mortgage payment-$1,398

Property tax-$250

Insurance-$100

Maintenance (est.)-$208

Property management-$176

Vacancy loss-$110

Net Cash Flow-$42.76/mo

10-Year Equity Projection

Year	Property Value	Loan Balance	Equity	Cum. Cash Flow	Total Return
Now	$250K	$200K	$50K	$0	+$0
Yr 1	$258K	$198K	$59K	-$513	+$9K
Yr 2	$265K	$196K	$69K	-$1K	+$18K
Yr 4	$281K	$192K	$90K	-$2K	+$38K
Yr 6	$299K	$187K	$112K	-$3K	+$59K
Yr 8	$317K	$181K	$136K	-$4K	+$82K
Yr 10	$336K	$174K	$162K	-$5K	+$107K

Monthly mortgage payment

PMT = P × r(1+r)ⁿ / ((1+r)ⁿ − 1)

P=$200,000, r=0.006250, n=360

= $1,398.43/mo

Net Operating Income (NOI)

NOI = effective_annual_rent − annual_operating_expenses

($2,200 × 12 × 95%) − $8,812

= $16,268/yr

NOI excludes mortgage — it measures property efficiency.

Cap Rate

cap_rate = NOI / purchase_price × 100

$16,268 / $250,000 × 100

= 6.51%

5–8% is typical for residential. Higher = better unlevered return.

Cash-on-Cash Return

CoC = annual_cash_flow / down_payment × 100

-$513 / $50,000 × 100

= -1.03%

Measures return on your actual cash invested. Compare to S&P 500 avg ~10%.

1% Rule check

monthly_rent / purchase_price × 100

$2,200 / $250,000 × 100

= 0.88% — FAILS

Quick filter: rent ≥ 1% of purchase price = likely cash-flow positive. Not a guarantee.

Key insight

Cap rate tells you the property's return without leverage — compare it across markets. Cash-on-cash is your actual return on invested cash — when CoC < S&P 500 average (~10%), you need to ask if the appreciation and tax benefits justify the illiquidity. The 1% rule is a quick filter, not a guarantee: markets like Austin or Denver may never hit 1%, while Midwest markets routinely exceed it.

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