What is a good Cap Rate for a rental property in 2026?

A good Cap Rate generally ranges between 6% and 10% depending on the market tier. Prime coastal Class A properties often trade at 5-6% Cap Rates, while Midwest and Sunbelt secondary markets frequently offer 7-9% Cap Rates.

What is the 1% Rule in Real Estate?

The 1% rule states that the monthly gross rent of an investment property should equal at least 1% of the total acquisition purchase price to ensure robust positive monthly cash flow after all expenses.

Rental Property Cash Flow & Cap Rate Calculator

Analyze residential real estate deals in seconds. Calculate monthly net cash flow, Cap Rate, Cash-on-Cash returns, and 10-year equity accumulation.

Purchase & Financing Terms

Deal Analyzer

Strategy Deal Presets

Purchase Price ($)

Down Payment (%)

Mortgage Interest Rate (%)

Monthly Gross Rent ($)

Annual Property Taxes ($)

Annual Insurance ($)

Management Fee (%)

Maintenance & CapEx (%)

Investment Returns & Cash Flow

Net Monthly Cash Flow

$456.84/mo

Cap Rate 7.2%

Cash-on-Cash 8.7%

Annual NOI $20,520

Gross Annual Rent (100% Occupancy) $28,800.00

Monthly Mortgage Principal & Interest (P&I) -$1,479.16/mo

Taxes & Insurance (Escrow) -$366.67/mo

Management & CapEx Reserves (18%) -$432.00/mo

Total Initial Cash Required (Down + 3% Closing) $65,550.00

Rental Property Investment FAQs

What is the difference between Cap Rate and Cash-on-Cash Return?

Cap Rate (Capitalization Rate) measures property profitability unleveraged (all-cash purchase: Net Operating Income divided by Purchase Price). Cash-on-Cash return measures the annual net cash flow dividend specifically on your actual out-of-pocket cash invested (down payment and closing costs).

Why should I set aside 10% for CapEx and Maintenance?

CapEx (Capital Expenditures) accounts for long-term big-ticket replacements like roofs, HVAC systems, and water heaters. Setting aside 8-12% of gross monthly rent protects your cash flow from unexpected repair shocks.

Cash Flow: $456.84/mo