How do I calculate rental income?

To calculate rental income, start with your monthly rent and multiply by 12 to get gross annual income. Then subtract vacancy losses (typically 5-10% of gross income) to get effective gross income. Finally, subtract operating expenses like property taxes, insurance, and maintenance to arrive at your net operating income (NOI).

What is the difference between gross and net rental income?

Gross rental income is the total rent collected before any deductions. Net rental income (or Net Operating Income) is what remains after subtracting vacancy losses and operating expenses. Net income gives you the true picture of your property's earning potential.

What expenses should I include when calculating rental income?

Common operating expenses include property taxes, insurance, maintenance and repairs, property management fees, HOA fees, utilities (if owner-paid), landscaping, and pest control. Do not include mortgage payments in operating expenses - those come after NOI when calculating cash flow.

What is a good vacancy rate to use?

Most landlords use a 5-10% vacancy rate for calculations. In strong rental markets with high demand, 5% is reasonable. In areas with higher turnover or seasonal rentals, use 8-10%. This accounts for time between tenants, lease-up periods, and potential non-payment.

What is Net Operating Income (NOI)?

Net Operating Income (NOI) is your rental property's income after subtracting vacancy losses and all operating expenses, but before mortgage payments. NOI is a key metric used by real estate investors to evaluate property performance and is used to calculate cap rate.

How much rental income do I need to cover expenses?

A general rule is that operating expenses typically run 35-50% of gross rental income for residential properties. This means if you collect $2,000/month in rent, expect $700-$1,000 in monthly operating costs. The remaining amount is your NOI.

Should I include mortgage payments in rental income calculations?

Mortgage payments are not included in operating expenses when calculating NOI. However, when calculating actual cash flow, you subtract your mortgage payment from NOI. This calculator focuses on income and NOI - use our ROI calculator for cash flow after financing.

How do I estimate operating expenses for a rental property?

A common rule of thumb is to budget 1% of the property value annually for maintenance, plus actual costs for taxes, insurance, and management. For a $300,000 property, that's $3,000/year for maintenance alone. Add property taxes (varies by location), insurance ($1,000-2,000/year), and management fees (8-10% of rent if applicable).

What is effective gross income?

Effective Gross Income (EGI) is your gross rental income minus vacancy and collection losses. If your gross annual rent is $24,000 and you assume a 5% vacancy rate, your EGI would be $22,800. This is a more realistic income figure than gross rent alone.

How can I increase my rental income?

To increase rental income: raise rents to market rate, reduce vacancy by improving tenant retention, add income streams (pet rent, parking, storage), reduce operating costs through preventive maintenance, and consider value-add improvements that justify higher rents.

Rental Income Calculator - Calculate Rental Income Easily

Rental income calculator

Calculate your rental property income after vacancy and operating expenses.

Monthly Rent

Vacancy Rate5%

Account for time between tenants and potential non-payment

Annual Operating Expenses

Property taxes, insurance, maintenance, management fees, etc.

Track my rental income→

Net Operating Income

$16,800/year

Annual income after vacancy and expenses

Monthly Net Income$1,400

Income Breakdown

Gross Annual Income$24,000

Vacancy Loss (5%)-$1,200

Effective Gross Income$22,800

Operating Expenses-$6,000

Net Operating Income$16,800

Monthly Breakdown

Monthly Rent$2,000

Vacancy Loss (avg)-$100

Operating Expenses-$500

Monthly Net Income$1,400

Want to analyze investment returns?

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Frequently Asked Questions

Common questions about using this calculator

Understanding Rental Income

Key concepts for calculating your rental property earnings

Gross vs. Net Income

Gross rental income is your total potential rent. Net Operating Income (NOI) is what remains after vacancy and operating expenses. NOI is the true measure of your property's earning power. Calculate your ROI to see investment returns.

Vacancy Rate

Even great properties have vacancy. Budget 5-10% of gross income for time between tenants, lease-up periods, and collection losses. This gives you a realistic income projection rather than an optimistic one.

Operating Expenses

Operating expenses typically run 35-50% of gross rent. Include property taxes, insurance, maintenance, repairs, and management fees. Don't include mortgage payments — those come after NOI.

From Income to Cash Flow

NOI shows property income before financing. To see actual cash flow, subtract your mortgage payment from NOI. Track your cash flow automatically with Rentlab.

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