About RentalInvestCalc

Transparent Methodology. Verified Sources. Built for Investors.

📐 Core Calculation Formulas

All calculators use industry-standard formulas aligned with IRS publications and NMHC research standards.

Cap Rate
Cap Rate = NOI ÷ Purchase Price
Measures unleveraged return. A rate above 6% is generally considered good for residential rentals (NMHC 2024).
Cash-on-Cash Return
Cash-on-Cash = Annual Cash Flow ÷ Total Cash Invested
Measures leveraged return on actual cash deployed (down payment + closing costs + rehab).
Net Operating Income (NOI)
NOI = Effective Gross Rent − Operating Expenses
Operating expenses include property tax, insurance, maintenance, property management, and vacancy loss. Does NOT include mortgage payments or depreciation.
1% Rule (Quick Screen)
Monthly Rent ≥ 1% of Purchase Price
A quick screening heuristic. Properties meeting the 1% rule are more likely to cash flow in most markets.

📋 IRS Depreciation Rules

The tax depreciation calculator is based on official IRS publications. Always verify with your CPA.

Property TypeRecovery PeriodAuthorityMethod
Residential Rental Property 27.5 years IRS Publication 527 Straight-line (Mid-month convention)
Commercial Rental Property 39 years IRC § 168 Straight-line (Mid-month convention)
Land Not depreciable IRS Pub 527 N/A
Note: Only the building value (purchase price minus land value) is depreciable. The IRS requires using the mid-month convention for real property. Bonus depreciation and Section 179 may apply to certain improvements — consult IRS Pub 946 for details.

🔄 BRRRR Strategy Calculation Method

The BRRRR calculator models the full investment cycle across five phases:

1
Buy
Acquisition cost = Purchase price + closing costs. Enter your all-in offer price.
2
Renovate
Rehab costs are added to total capital invested. After renovation, the After Repair Value (ARV) is estimated.
3
Rent
Projected market rent determines ongoing cash flow after refinance. Vacancy and expenses are modeled.
4
Refinance
Cash-out refinance at target LTV (typically 75%). Loan amount = ARV × LTV%. The refinance covers acquisition + rehab if LTV is high enough.
5
Repeat
Cash left in deal after refinance. If $0 remains, this is an "infinite return" — the holy grail of BRRRR.

📊 Data Sources & Benchmarks

IRS Publication 527 (Residential Rental Property)
Governs depreciation recovery periods, mid-month convention, and what improvements are depreciable vs. expensable. Used in Tab 4 (IRS Depreciation Calculator).
NMHC 2024 (National Multifamily Housing Council)
Cap rate benchmarks by market. National average cap rate ~5.5% for multifamily (NMHC 2024). Used in benchmark comparisons.
CoStar 2024 (Commercial Real Estate Data)
Commercial real estate market data including rent growth, vacancy rates, and cap rate trends. Referenced for multifamily market context.
NAR 2024 (National Association of Realtors)
Median rent trends and housing affordability data. Used for market benchmark context in long-term rental analysis.
Freddie Mac PMMS (Primary Mortgage Market Survey)
Weekly average mortgage rates. Default rate in calculators is based on recent PMMS averages. Users can override with their actual quoted rate.
AirDNA 2024 (Short-Term Rental Market Research)
STR occupancy rates and nightly rate benchmarks by market. US national STR average occupancy ~55% (AirDNA 2024). Used in Tab 3 (Airbnb/STR) methodology.

🏅 Our Commitment to Accuracy & Transparency

RentalInvestCalc is built on three principles:

✅ Verified Formulas
All calculation formulas are based on industry-standard definitions from IRS publications (527, 946), NMHC research, and CFPB mortgage guidelines. No "black box" calculations.
✅ Public Data Sources
Market benchmarks reference only publicly available, citable sources: IRS.gov, NMHC.org, CoStar, NAR.realtor, FreddieMac.com, AirDNA.co. No proprietary or undisclosed data models.
✅ No False Credentials
RentalInvestCalc does not claim CPA certification, legal licensure, or real estate broker credentials. We are a free educational tool. All tax estimates should be verified with a licensed CPA.

⚖️ Compliance & Disclaimer

Not Financial or Tax Advice: RentalInvestCalc provides estimates for educational purposes only. All calculations are based on user-provided inputs and standard industry formulas, but do not account for your personal financial situation, local tax laws, or changing market conditions.

No Professional Relationship: Use of this website does not create an accountant-client, attorney-client, or broker-client relationship. No fiduciary duty is established.

Consult Professionals: Before making any real estate investment decision, consult with: (1) a licensed CPA for tax implications; (2) a licensed real estate professional for local market conditions; (3) a licensed mortgage professional for financing options.

Data Accuracy: While we strive for accuracy, RentalInvestCalc makes no warranties about the completeness, reliability, or accuracy of the calculations or data. Use at your own risk.