What You Need to Know
Why This Calculator Matters
Real estate investing can build serious wealth, but the numbers must work. This calculator reveals true returns including all costs.
Who Needs This
First-time real estate investors, house flippers analyzing deals, or anyone evaluating investment property opportunities.
Key Insight
Cash-on-cash return matters more than cap rate for leveraged investments. A property with 8% cap rate but 15% cash-on-cash might beat a 10% cap rate property.
Common Mistake
Underestimating repair and vacancy costs. Budget 1-2% of property value annually for maintenance and 5-8% for vacancy.
Pro Tip
The 1% rule is a quick filter: monthly rent should be at least 1% of purchase price. A $200,000 property should rent for $2,000+.
Real-World Example
Scenario: $250,000 rental property, $50,000 down
$2,000/month rent - $1,400 PITI - $200 maintenance - $100 vacancy = $300 cash flow
$3,600/year ÷ $50,000 invested = 7.2% cash-on-cash return, plus appreciation and equity buildup.
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