I recently purchased my first rental property which is something I have been wanting to do for quite some time now! Before purchasing the property, I did a ton of research. I read books, online articles and forums, and watched a ton of YouTube videos.

I wanted to learn as much about rental properties as I could. Some things I’m sure I will learn a lot more about just from being a landlord and dealing with them in real life. However, one of the most important things I learned from my research is how to analyze a potential deal. After all, a rental property is an investment and you want to minimize the chance of losing money on the deal.

There are many ways to calculate return on investment (ROI) in rentals, but the one I personally like to focus on is cash on cash (CoC). CoC is calculated by the following:

\[\frac{annual ~ cashflow}{cash ~ invested}\]

When I was looking for my first property, I was manually calculating possible returns for every property. This was great practice, but it was time consuming. So, I made a quick rental property analyzer that I can now use to input estimated numbers for the property and it will spit out the monthly cash flow, monthly costs, and the CoC return. I account for expenses such as mortgage payment, property taxes / insurance, utilities, property management, repairs, capex and vacancy.

This is not meant to be iron clad, but it gives at least a general overview of what kind of return you can expect to get from a property.

You can check out the analyzer here.