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Enter your numbers to see the result. The faded values are an example.
What each number means
Worked example
A $250,000 house renting for $2,100 a month, 25.0% down, a 30-year loan at 7.0%, 5.0% vacancy and operating expenses at 30.0% of income: NOI $16,758, cap rate 6.7%, a loan payment of $1,247 a month, cash flow $1,789 a year, cash-on-cash 2.5% and DSCR 1.12.
If you plan to refinance (BRRRR)
Fannie Mae caps a cash-out refinance on an investment property at 75.0% of value for one unit and 70.0% for two to four, generally after six months on title (Selling Guide B2-1.3-03). Run the rental numbers at the refinanced loan, not the purchase loan: that is the payment the rent has to carry.
Questions
It depends on the market and the risk. Compare cap rates of similar properties in the same area rather than to a national rule of thumb.
Under 1.00 the rent doesn't cover the loan payment. DSCR lenders each set their own minimum above that, so ask yours before you count on a refinance.
Property taxes, insurance, repairs and maintenance, management, and any utilities or HOA dues you pay. Not the loan payment, which is separate.
Sources
- 1.Selling Guide B2-1.3-03, cash-out refinance · Fannie Mae · read October 30, 2026
Changes
- : First published.