Assumptions
Defaults are conservative on purpose. Replace them with your market.
| Input | Default |
|---|---|
| Down payment | 25% |
| Term | 30 years |
| Closing costs | $6,750 on a $225k example (~3%) |
| Vacancy | 7% |
| Management | 10% of collected rent |
| Maintenance | 8% of rent |
| Capex reserve | 5% of rent |
Why not 0% vacancy
Turnover is not optional. Even a “great tenant” leaves. Budgeting 5–10% is normal for long-term rentals. Use 5% only in a tight market with long tenancies.
Why management is on by default
If you self-manage, check the box. The fee goes to $0, but you should still know what that labor is worth. Cash-on-cash that depends on unpaid nights and weekends is not the same as cash-on-cash from the property.
Capex is not optional
Roofs, HVAC, water heaters, and flooring do not care that this year was quiet. See vacancy and capex.