Rental Property Parameters
For the 20 Years Invested
Return (IRR)
18.42% per year
Total Profit when Sold
$402,304.36
Cash on Cash Return
874.57%
Capitalization Rate
8.05%
Total Rental Income
$612,644.54
Total Mortgage Payments
$230,227.40
Total Expenses
$180,031.51
Total Net Operating Income
$432,613.03
First Year Income and Expense
| Monthly | Annual |
|---|
First Year Expense Breakdown
Breakdown Over Time
| Year | Annual Income | Mortgage | Expenses | Cash Flow | Cash on Cash Return | Equity Accumulated | Cash to Receive | Return (IRR) |
|---|
Understanding Rental Property Returns
A rental property's performance is usually measured through a handful of core metrics: cash flow (what's left over each month after all expenses), cap rate (the property's unlevered yield based on its purchase price), cash-on-cash return (how hard your actual invested cash is working for you), and IRR (the annualized return of every dollar in and out over the entire holding period, including the eventual sale).
Cap Rate vs. Cash-on-Cash Return
Cap rate divides net operating income by the purchase price and ignores financing entirely, making it useful for comparing properties on equal footing. Cash-on-cash return instead divides your actual profit by the cash you put in, so it reflects the effect of any loan you used to buy the property.
Why IRR Matters
Unlike a simple return percentage, IRR accounts for the timing of every cash flow, from your initial down payment through years of rental income to the lump sum you receive when the property is eventually sold. It's the most complete single number for comparing this investment to others.