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Methodology

How Our Calculations Work

Every number comes from a formula on this page. Inputs are user-entered, assumptions are visible, and results are estimates.

Where the numbers come from

Every calculation uses figures you enter. The site does not estimate rent, property value, taxes, insurance, credit, or available interest rates. This makes the arithmetic transparent and the result only as accurate as the inputs.

Currency is displayed to the nearest dollar, ratios to two decimals, and return percentages to one decimal. Calculations run unrounded.

The formulas

Monthly mortgage payment

M = P × [r(1 + r)^n] ÷ [(1 + r)^n - 1]

P is principal, r is the monthly interest rate, and n is the number of monthly payments. At a zero rate, payment is principal divided by months.

DSCR

DSCR = Gross monthly rental income ÷ PITIA

PITIA includes principal, interest, taxes, insurance, and association dues. Commercial lenders may instead divide NOI by total debt service.

Cash flow

Monthly cash flow = Effective income - Operating expenses - Principal and interest

Vacancy reduces gross income. Taxes, insurance, dues, management, maintenance, capital reserves, utilities, and other costs sit in operating expenses.

Loan-to-value

LTV = Loan amount ÷ Property value

Property value defaults to purchase price when a separate value is not entered.

Rent required at a target ratio

Rent required = Target DSCR × PITIA

The rent a lender would need to see for the payment to clear a chosen coverage target.

Maximum supported payment

Maximum payment = Gross monthly rent ÷ Target DSCR

The largest full housing payment a given rent still supports at that target.

Break-even rent

Break-even rent = (Operating expenses + Debt service) ÷ (1 - Vacancy rate)

The rent where the modeled monthly margin reaches zero. This is not a lender threshold; published coverage minimums sit well above it.

Stress cases

Stressed DSCR = Adjusted rent ÷ Adjusted PITIA

Each stress case re-runs the whole calculation with one input moved, so a stressed figure cannot drift from the base it is compared against.

Assumptions and limits

  • Vacancy is applied as a flat share of gross income.
  • Operating expenses stay constant across the modeled year.
  • No appreciation, rent growth, inflation, or tax effect is modeled. This site does not compute investment-return metrics.
  • Percentage expenses recalculate when rent changes.
  • Actual results differ with occupancy, taxes, insurance, repairs, and property condition.

What the site does not do

It does not quote rates, predict approval, appraise a property, estimate rent, evaluate credit, or provide investment, tax, or legal advice.

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Now that the formulas are visible, put a property's own numbers through them.

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