Rental Income Estimator
Estimate your monthly and annual rental income after accounting for vacancy, taxes, insurance, maintenance, and management fees.
Results
Visualization
How It Works
The rental income estimator shows what you actually take home each month after all operating expenses. Most new landlords overestimate income by ignoring vacancy, maintenance reserves, and management costs. This calculator gives you the realistic number.
The Formula
Variables
- Monthly Rent — The listed or expected monthly rental rate
- Vacancy Rate — Percentage of time the unit is expected to be vacant (typically 3-8%)
- Management Fee — Percentage of rent charged by a property manager (typically 8-12%)
- Effective Income — Gross rent adjusted downward for expected vacancy
- Net Income — Cash remaining after all operating expenses are paid
Worked Example
You charge $2,000/month rent with a 5% vacancy rate. Monthly expenses: $250 taxes, $125 insurance, $150 maintenance, and 8% management fee ($160). Effective income = $2,000 x 0.95 = $1,900. Total expenses = $250 + $125 + $150 + $160 = $685. Net monthly income = $1,900 - $685 = $1,215, or $14,580 per year.
Practical Tips
- Budget at least 5% vacancy even in hot markets — tenant turnover is inevitable.
- Set aside 1% of property value per year for maintenance reserves ($3,000/year on a $300K property).
- Self-managing saves 8-12% in fees but costs you time — value your hours realistically.
- Insurance costs are rising fast — get quotes annually and consider bundling with your landlord policy.
- Track actual expenses monthly to refine your estimates and catch cost creep early.
Frequently Asked Questions
What vacancy rate should I use?
For single-family homes in strong markets, 3-5% is reasonable. For multi-family or in weaker markets, use 8-10%. Check your local market's average days on market for rentals to calibrate.
Should I include mortgage payments as an expense?
Not in this calculator — this estimates operating income (NOI). Your mortgage payment reduces cash flow but is a financing cost, not an operating expense. Subtract it separately to get true cash flow.
What does a property manager typically charge?
Most charge 8-12% of collected rent, plus a leasing fee (50-100% of one month's rent) when placing a new tenant. Some also charge maintenance markups of 10-20%.
How do I estimate maintenance costs?
The common rules of thumb are: 1% of property value per year, or $1 per square foot per year. Older properties (20+ years) should budget 1.5-2%. HVAC, roof, and water heaters are the biggest surprise costs.
Is rental income taxable?
Yes. Rental income is reported on Schedule E. However, you can deduct operating expenses, depreciation, mortgage interest, and more. Many landlords show a paper loss even while collecting positive cash flow.