Single-Family Investment Calculator
5-year return projection including cash flow, appreciation, and equity buildup.
Inputs
Results
5-Year Cash Flow + Equity
5-Year Projection
| Year | Cash Flow | Property Value | Equity |
|---|---|---|---|
| 1 | -$1,489 | $288,400 | $66,568 |
| 2 | -$839 | $297,052 | $77,551 |
| 3 | -$171 | $305,964 | $88,967 |
| 4 | $518 | $315,142 | $100,839 |
| 5 | $1,228 | $324,597 | $113,188 |
Sam's Take
Single-family rentals look unsexy compared to multifamily on paper — fewer doors per dollar, less efficiency. But they sell faster, finance easier, and tenants stay longer. The 5-year return is misleading if you don't include the four ways you make money: cash flow, principal paydown, appreciation, and tax benefits (depreciation isn't shown here but is real). Don't chase the highest cash flow alone.
Related Calculators
The four ways a rental actually makes you money
People look at rentals and ask "how much cash flow?" — and that's a real question, but it's only one of four returns running at the same time. This is the thing that confuses beginners: a rental can cash flow $200/month and still be making you ten times that much in total return, because three other engines are running in the background. Here's what's actually happening:
- Cash flow. The check that hits your bank every month after every expense. The visible part. The part most calculators stop at.
- Principal paydown. Every mortgage payment your tenant covers, a portion goes to principal — meaning your loan balance shrinks. After 5 years on a 30-year loan, you've cut the principal by about 10%. After 10 years, ~20%. Your tenant is buying you the building, slowly. You don't see this as cash but it shows up as equity when you sell or refinance.
- Appreciation. The property gains value over time. Nationally, residential real estate has averaged 3-4% per year over long periods. In hot markets like Boston metro, it's been significantly higher. The reason this matters more than it sounds: you're getting that appreciation on the entire property value, not just the equity. If you put 25% down on a $400K property and it appreciates 4%, that's $16K of value gained on $100K of cash you put in — a 16% return on your cash, from appreciation alone, before counting anything else.
- Tax benefits. Depreciation lets you deduct the building's basis over 27.5 years. Combined with mortgage interest deduction and operating expense deductions, real estate is one of the most tax-advantaged investments available to people who aren't wealthy enough for private equity. The tax benefits depend on your situation, but for high-income investors they typically add 1-3% to your annualized return.
The calculator above captures the first three. Tax benefits vary too much by individual situation to model in a generic calculator, but if you're in a high tax bracket, add 1-3% to whatever the IRR shows here for a more honest total-return picture.
This is why "the deal doesn't cash flow" is a misleading frame. A property that breaks even on cash flow with 25% down can still be returning 8-12% annually once you count paydown, appreciation, and tax shield. Doesn't mean you should buy negative cash flow — that's still capital you're losing every month — but it means the right comparison isn't cash flow vs cash flow. It's total return vs total return.