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Home, Property & Mortgages

Property Investment Yield Calculator

Calculate cap rate, net operating income, cash flow, cash-on-cash return and DSCR for a rental property investment.

Your inputs

Results

Cap rate

6.833%

Net operating income (NOI)
$20,500.00
Annual cash flow after debt service
$8,500.00
Cash-on-cash return
11.333%
Debt service coverage ratio
1.71

✓Exact calculation — rounded only for display

Inputs are never added to links for financial, salary or health calculators.

What this calculator does

Investors use several yields: cap rate measures the property’s income relative to price regardless of financing; cash-on-cash shows the return on the cash you put in.

Formula and method

NOI = rent × (1 − vacancy) − operating expenses; Cap rate = NOI ÷ price Cash flow = NOI − debt service; Cash-on-cash = cash flow ÷ cash invested; DSCR = NOI ÷ debt service

Worked example

Calculated by this tool with its default inputs:

Inputs

  • Purchase price: 300000 (any currency)
  • Gross annual rent: 30000 (any currency)
  • Vacancy and credit loss: 5 %
  • Annual operating expenses (excl. mortgage): 8000 (any currency)
  • Annual mortgage payments (debt service): 12000 (any currency)
  • Total cash invested (down payment + costs): 75000 (any currency)

Results

  • Cap rate: 6.833%
  • Net operating income (NOI): 20,500
  • Annual cash flow after debt service: 8,500
  • Cash-on-cash return: 11.333%
  • Debt service coverage ratio: 1.71

How to read the results

Lenders often look for DSCR above about 1.2. A cap rate below the mortgage rate means leverage reduces your return.

Assumptions and limitations

  • Operating expenses exclude mortgage payments and depreciation.
  • Capital expenditures should be budgeted separately.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

Is a higher cap rate always better?

Not necessarily — higher cap rates often reflect higher risk or weaker locations.

Methodology and verification

Result type
Exact mathematical calculation (rounded only for display)
Formula version
1.0
Automated verification
3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy