Real Estate Investment Calculator
Monthly cash flow, cash-on-cash return and gross rent yield for a rental property.
Property Data
Annual net income divided by total cash invested.
Gross rent yield: 10.5% (a year of rent ÷ purchase price)
Does not include appreciation or tax benefits (depreciation), which can boost total ROI significantly.
(sends these numbers to Ask; we don't keep them)
Clinical Context & Calculation Details
How to Use This Calculator
The calculator has four inputs. Enter them in order, using numbers you can document rather than the listing's pro forma.
- Purchase Price: the contract price of the property. Use the offer you would actually make, not the asking price. This number is used only for the gross rent yield.
- Initial Cash Investment (Down + Rehab): every dollar you put in before the first rent check. That is your down payment plus closing costs, loan fees, inspection, and any repairs or furnishing needed to rent it. Your lender's Loan Estimate shows the cash to close; add your repair budget on top. This is the denominator of cash-on-cash return.
- Monthly Rent Income: the rent you expect to collect. Check what comparable units nearby actually rent for, and be conservative. If you want vacancy built in, you can enter rent already reduced for empty months, or count vacancy as an expense in the next field (not both).
- Total Monthly Expenses (PITI + Maint): one combined monthly figure. Include mortgage principal and interest (from the Loan Estimate), property taxes (the county tax bill divided by 12), landlord insurance (your quote divided by 12), HOA dues, property management, utilities you pay, and a monthly reserve for repairs, replacements, and vacancy. The calculator does not compute a mortgage payment for you, so this field has to carry everything.
The results update as you type: Monthly Cash Flow (shown in red with a “Negative Cash Flow” tag if it is below zero), Cash-on-Cash Return, and Gross rent yield. The Save button keeps the result in your free account so you can compare properties later.
Why Doctors Need This
Physicians tend to have high incomes, little free time, and a tax situation that limits what rental real estate can do for them. That combination makes it easy to buy a property for the wrong reasons: a colleague's success story, a tax pitch, or a house you would like to own anyway.
The tax pitch deserves the most skepticism. Rental losses are passive, and at a physician income they usually cannot offset your W-2 wages; they sit suspended until you have passive income or sell. Our physician real estate tax guide walks through when Real Estate Professional Status or the short-term rental rules change that. If they do not apply to you, the property has to stand on its cash flow.
Time is the other cost. Even with a property manager, vacancies, repairs, and tenant problems still reach you. A quick cash-on-cash number tells you whether the return is large enough to justify that, compared with passive options such as index funds or REITs covered in our guide to real estate investing for physicians.
The Math Behind It
The calculator runs three formulas, using the four inputs exactly as you enter them:
Monthly Cash Flow = Monthly Rent Income − Total Monthly Expenses (PITI + Maint)
Annual cash flow = Monthly Cash Flow × 12 (used internally, not displayed)
Cash-on-Cash Return = (Annual cash flow ÷ Initial Cash Investment) × 100, shown to one decimal place. If the cash investment is zero, it shows a dash instead of a number.
Gross rent yield = (Monthly Rent Income × 12 ÷ Purchase Price) × 100, shown to one decimal place. If the price is zero, it shows a dash.
There are no hidden constants: no tax rate, vacancy rate, interest rate, appreciation rate, or depreciation schedule. Monthly Cash Flow is rounded to the nearest dollar for display.
Pearls & Pitfalls
- Pitfall: Entering only the mortgage payment as your expense. Taxes, insurance, management, repairs, and empty months are real costs. Management alone typically runs 8 to 12 percent of gross rents.
- Pitfall: Treating gross rent yield as your return. In the worked example, a 9.0% gross yield turns into a negative cash-on-cash return once expenses are counted.
- Pearl: Run the numbers twice: once with your best estimate and once with lower rent and higher expenses. If the property only cash-flows in the optimistic case, you are betting on appreciation.
- Pitfall: Counting on depreciation to rescue a negative cash flow. At a physician income, rental losses are usually passive and cannot offset your salary unless you or your spouse qualify for Real Estate Professional Status or the short-term rental rules.
- Pearl: If your modified adjusted gross income is above $200,000 (single) or $250,000 (married filing jointly), net rental income can owe the 3.8% Net Investment Income Tax on top of your ordinary rate, so after-tax cash flow is lower than the number shown here.
- Pearl: Include every dollar of closing costs and repairs in the cash invested. Leaving them out shrinks the denominator and overstates cash-on-cash return.
Worked Example
Step 1: the default inputs. The calculator opens with a $400,000 property, $100,000 of cash invested, $3,500 of monthly rent, and $1,800 of monthly expenses.
- Monthly Cash Flow: $3,500 − $1,800 = $1,700
- Annual cash flow: $1,700 × 12 = $20,400
- Cash-on-Cash Return: $20,400 ÷ $100,000 = 20.4%
- Gross rent yield: ($3,500 × 12) ÷ $400,000 = $42,000 ÷ $400,000 = 10.5%
Those defaults show how the math works, but $1,800 a month is too low to cover a mortgage on this property. The next example builds the expense line from its parts.
Step 2: a fuller set of expenses. Say you buy the same $400,000 house with 25% down ($100,000) plus $10,000 of closing costs and repairs, so your Initial Cash Investment is $110,000. Rent is $3,000. You finance $300,000 over 30 years at an example rate of 6.76%, Freddie Mac’s weekly 30-year average for September 10, 2026. The latest average is 7.18% for the week of November 5, 2026 (see this week’s mortgage rates), and an investment-property loan may be quoted higher. The tax, insurance, and reserve figures below are example amounts; use your own.
- Principal and interest on $300,000 at 6.76% for 30 years: $1,947.79, rounded to $1,948
- Property taxes: $400 a month
- Landlord insurance: $150 a month
- Property management at 10% of rent: $300
- Maintenance, replacement, and vacancy reserve: $300
- Total Monthly Expenses: $3,098
Step 3: the results.
- Monthly Cash Flow: $3,000 − $3,098 = −$98 (flagged as Negative Cash Flow)
- Annual cash flow: −$98 × 12 = −$1,176
- Cash-on-Cash Return: −$1,176 ÷ $110,000 = −1.1%
- Gross rent yield: $36,000 ÷ $400,000 = 9.0%
What it means. A 9.0% gross yield looks fine, yet you would pay $1,176 a year out of pocket to own this property. Because management is a share of rent, you would need rent of about $3,109 just to break even ($2,798 of fixed costs ÷ 0.90). The deal only works if you expect appreciation, principal paydown, or tax benefits you can actually use to make up the difference, and none of those show up in your bank account each month.
Both sets of results were produced by running these inputs through the same formulas the calculator uses.
Assumptions & Sources
- Pre-tax cash flow only. Results ignore income taxes, depreciation, appreciation, and the principal portion of your mortgage payment. The calculator says so under the results.
- Expenses are one number you supply. The calculator does not compute a mortgage payment, tax, insurance, vacancy, or management fee. Anything you leave out of Total Monthly Expenses makes the results look better than reality.
- Constant, year-one figures. Rent and expenses are treated as the same every month, and annual cash flow is simply 12 times the monthly figure. Rent increases, tax reassessments, and insurance changes are not modeled.
- Cash invested is your whole stake. Cash-on-Cash Return divides by the Initial Cash Investment only. It does not include later capital you add for repairs or replacements.
- Gross rent yield ignores all costs and financing. It is a quick screen, not a measure of profit.
Figures cited on this page:
- Example rate of 6.76%, the 30-year fixed mortgage average for the week of September 10, 2026 (latest: 7.18%, week of November 5, 2026): Freddie Mac Primary Mortgage Market Survey, via FRED (MORTGAGE30US). Used only in the worked example.
- Residential rental buildings are depreciated over 27.5 years: IRS Publication 527, Residential Rental Property.
- Passive activity loss rules, the $25,000 special allowance and its $100,000–$150,000 MAGI phaseout, and the 750-hour Real Estate Professional test: IRS Publication 925, Passive Activity and At-Risk Rules.
- 3.8% Net Investment Income Tax, which applies when MAGI exceeds $200,000 (single) or $250,000 (married filing jointly): IRS, Questions and Answers on the Net Investment Income Tax.
- Property management fees of 8 to 12 percent of gross rents and syndication hold periods of 3 to 7 years: our real estate investing guide.
This calculator is for education. It is not tax, legal, or investment advice.
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About the Author
Joshua Dunigan, DO | Family Medicine Resident & Founder
I'm a family medicine resident physician in Des Moines, Iowa (class of 2027). I founded MedMoneyGuide to give physicians specialty-specific financial guidance, with sources you can check.