How to Analyze a Rental Property (2026)

Analyzing a rental property comes down to a handful of numbers that tell you whether a deal makes money. Run them before you make an offer - not after. Here is what each metric means and how to use it in 2026.

The core metrics

• Cash flow. Monthly rent minus every expense (mortgage, taxes, insurance, management, maintenance, vacancy). Positive cash flow is the foundation; everything else is secondary.
• Cap rate. Net operating income divided by purchase price. It lets you compare properties regardless of financing - a quick read on the deal's quality. Many investors look for 5-8% depending on the market.
• Cash-on-cash return. Annual pre-tax cash flow divided by the actual cash you invested (down payment, closing, rehab). This is your real return on the money you put in.
• DSCR. Net operating income divided by debt service. Lenders want this above 1.2; below 1.0 means the property does not cover its own loan.
• The 1% rule. A fast screen: monthly rent should be roughly 1% of the purchase price. It is a filter, not a verdict - confirm with the full numbers.

Why a calculator beats a napkin

The mistake that loses money is forgetting expenses - vacancy, capital expenditure, management and maintenance. A proper analyzer forces every line in, so a deal that looks good at 'rent minus mortgage' reveals its real cash flow once all costs are counted.

Run your numbers

The Plannful Rental Property Analyzer calculates cash flow, cap rate, cash-on-cash, DSCR and amortization from your inputs in Excel or Google Sheets - underwrite a deal in minutes.

See the Rental Property Analyzer →

Running a short-term rental instead? Try the free Airbnb profit calculator to estimate STR cash flow, or the Multi-Property Dashboard once you own several.

Frequently asked questions