How RentalRundown calculates
Every financial result on this site comes from deterministic formulas — never a black box, never AI-generated arithmetic. The same inputs always produce the same output. This page documents exactly how.
The formulas
All calculators share one versioned calculation library, so a given metric is computed in exactly one place and can never disagree between pages.
| Gross scheduled income | (monthly rent + other income) × 12 |
| Effective gross income (EGI) | gross scheduled income − vacancy loss |
| Net operating income (NOI) | EGI − operating expenses |
| Monthly cash flow | (NOI − annual debt service − CapEx reserve) ÷ 12 |
| Cap rate | annual NOI ÷ purchase price |
| Cash-on-cash return | annual cash flow ÷ total cash invested |
| DSCR | annual NOI ÷ annual debt service |
| Gross rental yield | annual scheduled rent ÷ purchase price |
| Net rental yield | annual NOI ÷ total acquisition cost |
| Gross rent multiplier | purchase price ÷ annual scheduled rent |
| Break-even occupancy | (operating expenses + debt service + reserves) ÷ gross rent |
| Cash required to close | down payment + closing costs + loan fees + initial repairs |
| Net sale proceeds | sale price − selling costs − loan payoff |
| IRR | the rate where the net present value of all cash flows equals zero |
| Maximum offer price | the highest price that still satisfies every selected target |
Accounting conventions
- Vacancy, maintenance, and CapEx are taken as a percent of gross scheduled income; management as a percent of collected (effective) income.
- NOI excludes debt service, income tax, depreciation, and the CapEx reserve — so cap rate compares cleanly across differently-financed deals.
- Cash flow is NOI minus debt service minus the CapEx reserve, held out of NOI so a big-ticket reserve doesn't distort the property's yield.
- Every value is normalized to both monthly and annual views, and figures are rounded only for display — never mid-calculation.
- Projections base property value and the eventual sale on the after-repair value (which defaults to price plus repairs when you don't set one).
Default assumptions
When you leave a field blank, the calculator fills it with a conservative, US-national default so you always get a complete analysis. Every default is editable, and estimated figures (like taxes and insurance) are flagged so you know what to verify. Defaults are a starting point — replace them with real numbers for your property and market.
| Down payment | 25% of price |
| Interest rate | 7.0% |
| Loan term | 30 years |
| Closing costs | 3% of price |
| Property tax | 1.1% of price (estimated) |
| Insurance | 0.5% of price (estimated) |
| Vacancy | 5% of gross rent |
| Management | 8% of collected rent |
| Maintenance | 5% of gross rent |
| CapEx reserve | 5% of gross rent |
| Rent growth | 3% per year |
| Expense inflation | 3% per year |
| Appreciation | 3% per year |
| Selling costs | 7% of sale price |
The verdict and confidence
The verdict is rule-based and documented, not a judgment call. It compares your cash flow, cash-on-cash return, and DSCR against your targets, then stress-tests them against a conservative case — lower rent, higher vacancy and upkeep, and no appreciation. A property earns Promising only if it meets your targets and survives that stress; Negotiate if it would work at a lower price; Investigate if it's borderline; and High Risk if it fails key targets or can't cover its own mortgage.
Confidence is calculated separately from attractiveness. A deal that looks great but rests on estimated taxes, insurance, and rent is reported as Promising with low confidence — never as a sure thing. Verified, recent inputs raise it.
Data sources and limitations
RentalRundown currently works from the numbers you enter — it does not yet pull live market rents, comparable sales, or tax records. That keeps every analysis transparent and under your control, but it also means the output is only as accurate as your inputs. Property taxes, insurance, rents, and local regulations vary widely; verify them against county records, real quotes, and comparable listings.
These figures are educational estimates, not investment, tax, legal, or financial advice. See our financial disclaimer and consult licensed professionals before making an offer.
Last reviewed: August 2026.