Rental Property Max Offer Calculator
Enter the rent and the return you want. Get the most you can pay and still hit it. Free, no card, no email.
How it works
Most calculators ask for a price and tell you whether the deal works. This one starts from the other end. You give it the rent the property should bring in and the cash-on-cash return you want, and it finds the highest price where the numbers still get there, after the mortgage, taxes, insurance, vacancy, repairs and management.
That gives you a ceiling to take into a negotiation, and a fast way to rule out listings: if the asking price is well above your max, you can skip it without running the full numbers.
A worked example
Say a house rents for $1,450 a month and you want 8% cash-on-cash, putting 20% down on a 30-year loan at 7%.
- Max price: $147,443
- Cash you’d put in, with closing costs: $33,912
- Monthly cash flow at that price: $226
- If the rent turns out to be $1,350: max price drops to $137,275
- If your rate is 8% instead of 7%: max price drops to $138,066
Rent is the input to check hardest. Look at what two or three similar rentals nearby actually lease for. Asking rents on listings tend to run high.
What it assumes
Anything you don’t change uses the same defaults as our deal calculator: property tax of 1.1% of the price a year, insurance of 0.35%, 5% of rent for vacancy, 5% for repairs, 8% for management and 3% closing costs. Property tax varies a lot by state, so treat the result as a starting point and rerun the deal calculator with a real tax figure before you offer.
Questions
- How is this different from the 70% rule?
- The 70% rule is for flips: 70% of the after-repair value minus repairs. This calculator is for buy-and-hold rentals, so it works from the rent and the cash-on-cash return you want instead of a resale price.
- What cash-on-cash return should I target?
- Many buy-and-hold investors aim for 8% to 12%. A lower target buys a nicer area or a newer house, and a higher one usually means older stock or a tougher neighborhood. Pick a number you'd be happy with for years, then let listings meet it.
- Should I offer the max price?
- Usually not. It's the ceiling where the deal stops meeting your target. Most buyers start below it and leave room for repairs the inspection turns up.
- Why does the number drop so much when rent is $100 lower?
- Every dollar of rent you lose comes straight off your cash flow, while the mortgage, taxes and insurance stay the same. On a typical rental, $100 a month of rent can be worth $10,000 or more of purchase price.