Pro Forma Calculator
Enter your deal numbers and instantly see whether it pencils out — total return rated, cash flow in dollars, 10-year projection.
| Year | Home Value | Annual CF | Cum. CF | Equity | Total Return |
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Pre-tax estimates only. Consult a CPA for depreciation, 1031 exchanges, and tax treatment. Appreciation is an assumption — not a guarantee.
Frequently Asked Questions
What is a real estate pro forma?
A pro forma is a projected income statement for a rental property. It estimates annual revenue, operating expenses, NOI (net operating income), and cash flow based on your inputs: purchase price, gross rent, vacancy rate, property taxes, insurance, management fees, maintenance costs, and loan terms. Investors use pro formas to evaluate whether a deal meets their return threshold before making an offer.
What is a good cash-on-cash return for rental property?
A cash-on-cash return of 6–8% or higher is generally considered solid. Cash-on-cash = annual pre-tax cash flow ÷ total cash invested (down payment + closing costs). At mortgage rates above 7%, many markets produce negative cash-on-cash — but total return can still be positive once you include appreciation and equity build-up through principal paydown. This calculator shows all three components.
What is NOI and what is a good cap rate?
NOI (Net Operating Income) = effective gross rent − operating expenses (property taxes, insurance, management, maintenance/CapEx). It excludes mortgage payments, making it useful for comparing properties regardless of financing. Cap rate = NOI ÷ purchase price. A cap rate of 6% or higher is generally considered strong for residential real estate, though this varies by market and asset class.
What appreciation rate should I use in my pro forma?
Conservative pro formas use 2–3%/year, roughly matching U.S. long-run averages. Markets with strong population growth may reasonably assume 3–4%/yr; weaker markets may use 0–1.5%/yr. Always sensitivity-test at 0% appreciation — if the deal only works because of price growth, it carries more risk. See the Market Analyzer for tier-based appreciation assumptions by metro.
What is the 1% rule in real estate?
The 1% rule says monthly gross rent should be at least 1% of the purchase price (e.g., $2,500/mo on a $250,000 home). It implies a gross yield of roughly 12%, which typically produces positive cash flow. It's a quick screening heuristic — actual net cash flow depends on local property taxes, vacancy, insurance, and your financing rate. Use this calculator to verify before committing.
How much should I budget for maintenance on a rental property?
A standard rule of thumb is 1% of purchase price per year for maintenance and capital expenditures. A $250,000 property would budget $2,500/year — covering routine repairs, appliance replacements, and eventual big-ticket items like HVAC, roof, and water heater replacement. Older properties or those with deferred maintenance may need 1.5–2%. Our Home Maintenance guides cover typical system lifespans and replacement costs.