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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