This calculator prices a mortgage payment against a vacancy-adjusted rent and reports what is left every month, then projects equity build and a total annualized return over your hold. Run at the Freddie Mac 30-year rate of 6.71% (week ending September 3, 2026) against the national median asking price and rent, a 25%-down deal runs about $246 negative a month — a reminder that national medians rarely pencil at today's financing costs, and local numbers are what matter.
How this calculator turns four numbers into a cash-flow figure
The module computes a standard amortizing mortgage payment from purchase price, down payment, rate, and a fixed 30-year term, then subtracts it — along with property tax, insurance, and any other monthly cost you enter — from rent adjusted for vacancy. The vacancy adjustment happens first: effective rent = monthly rent × (1 − vacancy rate). A rent figure that never accounts for vacancy is the classic error this step is built to prevent — a unit sitting empty even one month in twelve is over 8% vacancy, well above what a zero-vacancy pro forma assumes.
Worked example — national medians at the current rate
To keep every input traceable to a real figure, this example uses the Census Bureau's Q2 2026 national median asking sale price of $343,800 as the purchase price, the same release's median asking rent of $1,531 as monthly rent, a 25% down payment ($85,950, an illustrative round share rather than a sourced figure), the Freddie Mac 6.71% rate on a 30-year loan, and the Census 7.3% national rental vacancy rate. Property tax, insurance, and other monthly costs are left at $0 because no verified national figure exists for any of them — the calculator asks for your own bill, and this example isolates the financing-and-vacancy math rather than guess at a tax rate.
| Metric | Value |
|---|---|
| Loan amount | $257,850 |
| Monthly mortgage (P&I) | $1,665.56 |
| Effective rent (after 7.3% vacancy) | $1,419.24 |
| Monthly net cash flow | −$246.32 |
| Annual cash flow | −$2,955.88 |
| Year-1 NOI | $17,030.84 |
| Cap rate | 4.95% |
Computed directly from this calculator's own formulas at $343,800 purchase price, $1,531 monthly rent, 6.71% rate, 25% down, 7.3% vacancy, and $0 for tax/insurance/other (undisclosed nationally, left to the user).
Held five years at 0% appreciation — this page does not forecast future price growth, so the example holds value flat to isolate the operating math — the negative monthly cash flow compounds to −$14,779 in total cash flow. But the loan amortizes: the balance falls from $257,850 to $241,951, producing $101,849 of equity against a flat $343,800 value. Total return works out to $1,120 over the down payment, or 1.30% cumulative — an annualized return of about 0.26%. The property is barely wealth-neutral at these exact national-median inputs, which is the point: run your own numbers, because the medians rarely match a specific listing.
The input that moves the result most
Of the calculator's inputs, the mortgage rate has the largest single effect on monthly cash flow because it applies to the entire loan balance every month, while rent and vacancy apply to a much smaller base. At the current 6.71% Freddie Mac rate, the $257,850 loan in the example above costs $1,665.56 a month; at a rate two points lower it would cost roughly $1,388 a month — a swing of nearly $280, more than the entire cash-flow gap in the worked example. Because rates move week to week, always re-check the current PMMS figure before treating a cash-flow estimate as current.
Vacancy is the second-largest lever, and the one most often set to zero by accident. The national rental vacancy rate was 7.3% in the Census Bureau's Q2 2026 Housing Vacancy Survey — treating a unit as rented 100% of the time overstates effective rent by that same margin, which on a $1,531 rent is about $112 a month of phantom income.
It is worth putting the example's 4.95% cap rate in context without treating it as a market rate: institutional buyers of stabilized, professionally managed apartment properties operate in a different tier entirely. CBRE's US cap rate survey put the national average going-in cap rate for core, Class A multifamily at 4.73%. That figure describes large institutional acquisitions, not a single median-priced home financed with a conventional mortgage, and the two should never be used interchangeably — but the direction is informative: institutional capital is willing to accept a lower current yield than the 4.95% this single-property example computes, because it is buying scale, professional management, and different risk, not a comparable asset.
What this cash-flow number excludes
- ·Property tax and insurance. No verified national dollar figure exists for either — local assessments and carrier quotes vary too widely. Enter your own.
- ·Maintenance and capital reserves. This module has no built-in maintenance percentage; it is not one of its inputs, so it applies none by default.
- ·Property management fees. Also not a field in this calculator — if you plan to hire a manager, fold the fee into the "other monthly costs" input yourself.
- ·Depreciation and its tax effects. This is a pre-tax cash-flow and equity model. IRS Publication 527 lets a residential rental depreciate the building portion of its basis straight-line over 27.5 years, which lowers taxable income without touching the cash flow this page reports. See the rental depreciation calculator for how that deduction and its eventual recapture change the after-tax picture.
- ·Future appreciation. The calculator has an appreciation input, but nothing on this page forecasts what rate to enter — the worked example above deliberately uses 0% so the result reflects financing and vacancy, not a price bet.
How to stress-test a listing against this model
Two swaps turn this into a useful screening tool for an actual listing. First, replace the national medians with the specific price and asking rent — a property below the $343,800 median or a rent above the $1,531 median can post positive cash flow at the same 6.71% rate even though the median-vs-median example above does not. Second, run the vacancy rate at something closer to your metro's actual figure rather than the national 7.3% — a landlord quoting a pro forma at 0% vacancy has, deliberately or not, made every property look better than this calculator would.
Negative cash flow is a decision, not a verdict
A property that does not cash flow is not automatically a bad purchase, and treating it as one misreads what the number measures.
Negative cash flow means the property does not pay for itself today. The return can still come from principal paydown, appreciation and tax treatment — but all three are slower, less certain, or both, and the shortfall has to be funded from elsewhere every month in the meantime.
The honest test is whether you can fund it reliably through a vacancy and a major repair in the same year. If you can, negative cash flow is a financing choice. If you cannot, it is a risk the spreadsheet is not showing you.
Methodology
All figures in the worked example are direct output of this calculator's own amortization and vacancy-adjustment formulas, run at the Census Bureau's Q2 2026 median asking price ($343,800) and median asking rent ($1,531), the Census 7.3% national rental vacancy rate, and the Freddie Mac PMMS 30-year rate for the week ending September 3, 2026 (6.71%). Property tax, insurance, and other monthly costs are set to $0 in the example because no verified national figures exist for them. Appreciation is set to 0% because this page does not forecast future price growth.
Sources
- US Census Bureau — Housing Vacancy Survey, Q2 2026 — accessed 2026-09-07
- Freddie Mac — Primary Mortgage Market Survey — accessed 2026-09-07
- CBRE — US Cap Rate Survey, H2 2025 — accessed 2026-09-07
- IRS — Publication 527, Residential Rental Property — accessed 2026-09-07