Calculatorism

Rental Property Calculator

Compute a rental property's net operating income (NOI), monthly/annual cash flow, cash-on-cash return and cap rate to assess the investment.

Input Data

Purchase Price
HK$
Down Percent
%
Annual Rate
%
Loan Years
yr
Monthly Rent
HK$
Vacancy Percent
%
Annual Operating Expenses
HK$
Closing Costs
HK$

Results

Rent after vacancy and operating expenses, before the mortgage.
HK$141,000
Total mortgage payments in a year.
HK$188,598.72
NOI minus the annual debt service.
HK$-47,598.72
Annual cash flow divided by 12.
HK$-3,966.56
Annual cash flow divided by total cash invested.
-2.8%
NOI divided by the purchase price.
2.82%
Down payment plus closing costs.
HK$1,700,000

At a glance:A rental property's return rests on a few ratios. NOI = (rent × (1 − vacancy)) − operating expenses (before mortgage). Cap rate = NOI ÷ purchase price. Cash-on-cash = annual cash flow ÷ total cash invested, where cash flow = NOI − debt service and cash invested = down payment + closing costs.

Formula

NOI = rent × (1 − vacancy%) − operating expenses.

Cap rate = NOI ÷ purchase price.

Cash-on-cash = (NOI − debt service) ÷ (down payment + closing costs).

$$\text{NOI} = \text{Rent} \times 12 \times (1 - \text{Vacancy}) - \text{Annual Opex}$$
$$\text{Annual Cash Flow} = \text{NOI} - \text{Annual Debt Service}$$
$$\text{Cash-on-Cash} = \dfrac{\text{Annual Cash Flow}}{\text{Down Payment} + \text{Closing Costs}} \times 100\%$$
$$\text{Cap Rate} = \dfrac{\text{NOI}}{\text{Purchase Price}} \times 100\%$$

How to Use

  1. Enter the purchase price, down percent, loan rate and term.
  2. Enter the monthly rent, vacancy, operating expenses and closing costs.
  3. Read the NOI, cash flow, cash-on-cash and cap rate.

FAQ

What is the difference between cash-on-cash return and cap rate?

Cap rate = NOI ÷ purchase price, ignoring the mortgage, used to compare the property's own yield. Cash-on-cash = annual cash flow ÷ the actual cash you put in (down payment + closing costs), reflecting the real yearly return once mortgage leverage is included.

Why deduct a vacancy rate?

In reality a property is rarely 100% occupied all year; tenant changeover, renovation or market conditions cause vacancy. Factoring vacancy into the collected rent gives a more realistic NOI and return, avoiding overstated income.

What else should I consider when investing in Hong Kong property?

Beyond this tool's yield metrics, count the transaction taxes — Ad Valorem Stamp Duty (AVD), Special Stamp Duty (SSD) and Buyer's Stamp Duty (BSD) where applicable (these can go into closing costs) — plus the rental market, interest-rate trend and appreciation potential. The tool provides a standard yield-analysis framework for comparison.

Why are many Hong Kong rental properties cash-flow negative?

Hong Kong prices are high relative to rents, so rental yields (cap rates) are generally only 2%–3.5%, often below the mortgage rate. With a high loan-to-value mortgage, rent may not cover the instalment, producing negative cash flow ('rent doesn't cover the mortgage'). Such investments effectively bet on price appreciation to offset the holding-period cash shortfall — higher risk, so size it to your means.

What should closing costs include?

Closing costs are one-off buying expenses: AVD stamp duty, and where applicable SSD or BSD, estate-agent commission, legal fees, and pre-move-in renovation and furniture. Including all of these in 'total cash invested' makes the cash-on-cash return reflect your true capital and avoids overstating returns.

Related Tools

References

Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.

Found a problem with the results?

If this calculator's result is wrong, or you have any question about the calculation logic, please let us know. You are viewing:Rental Property Calculator（/finance/rental-property）。