Free real estate calculator
Estimate real estate investment returns — purchase price, rental income, expenses, appreciation, and projected IRR, updated live, as you type.
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Does not include capital expenditures, vacancy surprises, or tax benefits. Consult a real estate professional for investment decisions.
Results are estimates. Consult a professional.
How the real estate calculator works
Professional investors evaluate real estate deals using a core set of ratios that separate income from financing, measure value relative to rent, and screen for basic profitability. This calculator computes all five major metrics simultaneously: cap rate, cash-on-cash return, gross rent multiplier, the 1% rule check, and a 50%-rule NOI estimate. Together they give you a complete first-pass picture of any income property.
The 50% rule is a quick underwriting heuristic: expect roughly half of gross rent to be consumed by operating expenses (taxes, insurance, management, maintenance, vacancy reserves). It is deliberately conservative — actual expenses on a well-maintained property may run 35–45% — but the conservatism protects against underwriting optimism.
National Association of Realtors — Research & StatisticsWorked example: $350k property, $2,200/mo rent
Chris is evaluating a $350,000 rental house in a suburb with strong tenant demand. The market rent is $2,200/month ($26,400/year). Chris will finance with 25% down ($87,500) at 7%, 30-year, giving a mortgage of roughly $1,742/month.
Key metrics by price and rent
The table below shows GRM and cap rate (50% expense rule) across a range of property prices and monthly rents. A GRM below 12 and cap rate above 6% are common investor thresholds, though local market conditions vary significantly.
| Monthly Rent | $300k Property | $400k Property | $500k Property |
|---|---|---|---|
| $1,800 (GRM / Cap) | 13.9× / 3.6% | 18.5× / 2.7% | 23.1× / 2.16% |
| $2,200 (GRM / Cap) | 11.4× / 4.4% | 15.2× / 3.3% | 19.0× / 2.64% |
| $2,800 (GRM / Cap) | 8.9× / 5.6% | 11.9× / 4.2% | 14.9× / 3.36% |
| $3,500 (GRM / Cap) | 7.1× / 7.0% | 9.5× / 5.25% | 11.9× / 4.2% |
Source: National Association of Realtors, BiggerPockets investing metrics. Cap rate uses 50% expense ratio.
Tips for analyzing real estate deals
No single metric tells the whole story of a real estate investment. Here is how to use these ratios as a system rather than individually.
- Use the 1% rule only as a first filter — In expensive markets (coastal cities, high-demand metros) almost nothing passes the 1% rule. That does not make everything a bad deal; it means the metric needs to be paired with a cap rate and appreciation analysis.
- Know your local market's cap rate range — Cap rates compress in high-demand markets (3–4% in coastal cities) and expand in slower markets (7–9% in the Midwest). Compare your target cap rate to recent comparable sales, not a national benchmark.
- Model the deal unlevered first — Calculate NOI and cap rate before adding a mortgage. This lets you evaluate the asset itself, independent of your financing terms. Then layer in debt to see how leverage affects your cash-on-cash return.
- GRM is most useful for portfolio screening — When comparing ten or twenty properties quickly, GRM is a fast filter. Under 12 is generally worth a deeper look; over 16 usually means rent is too low relative to price.
- Always stress-test with actual expenses — After the 50% rule passes, get real numbers: actual tax bills, insurance quotes, property management bids, and HOA fees. The 50% estimate is a floor, not a target.
Accuracy and limitations
The 50% rule and 1% rule are heuristics developed from broad market averages. They are reliable screening tools but not precise underwriting instruments. New construction typically has lower expense ratios (30–35%) while older properties often run higher (50–60%). Actual results depend on local tax rates, insurance costs, management quality, and tenant turnover.
Not financial advice — consult a real estate professional for your specific situation.
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