Home›50% Rule Calculator

5️⃣ 50% Rule Calculator

The 50% rule estimates operating expenses at half of gross rent, then subtracts mortgage to get estimated cash flow. Quick screening before full analysis.

📍 Property Address (optional)
InputsYour Numbers
Property & Financing
Purchase Price?
$
Down Payment %?
%
Interest Rate %?
%
Rental Income
Monthly Rent?
$
Pro Forma Monthly Rent?
$
As-Is AnalysisCurrent
Enter values to see results
Estimated Monthly CF
--
50% rule estimate
Estimated Expenses
--
50% of rent
Monthly Mortgage
--
P&I
CoC Return (est)
--
on down payment
50% Rule Calculation
Gross Monthly Rent--
Estimated Expenses (50%)--
Net Operating Income (est.)--
Mortgage Payment--
Est. Monthly Cash Flow--
50% Rule Context
Loan Amount--
Down Payment--
Annual Est. Cash Flow--
Estimated CoC Return--
What the 50% Includes (Estimate)
Property Tax (~1.1%/yr)--
Insurance (~0.6%/yr)--
Maintenance (10% of rent)--
Vacancy (8% of rent)--
CapEx / Management / Other--
Pro FormaAfter Plan
Enter pro forma values
Pro Forma CF
--
vs as-is
Pro Forma CoC
--
at higher rent
Actual vs 50% Test
--
full analysis check
50% Rule Accuracy
--
estimate quality
Pro Forma vs As-Is
As-Is CF (50% est.)--
Pro Forma CF (50% est.)--
CF Improvement--
When the 50% Rule Is Most/Least Accurate
Most accurate forSFR, 2-4 unit, avg market
Overestimates expenses onnew builds, low-tax areas
Underestimates expenses onolder homes, high-tax areas

📄 Email My Free Report

Full analysis sent to your inbox instantly.

1
Enter Price, Financing, and Rent
The 50% rule only needs three inputs: rent, down payment, and rate. It estimates all expenses as 50% of rent -- no itemizing required.
2
Understand What 50% Covers
The 50% estimate includes property tax (~11%), insurance (~6%), maintenance (~10%), vacancy (~8%), management (~8%), and capital expenditure reserve (~7%). No mortgage.
3
Use It for Quick Screening
If the 50% rule shows negative or very thin cash flow, the deal is unlikely to work. If it shows $300+/month, proceed to a full detailed analysis.
4
Know Its Limitations
The 50% rule is a rough estimate -- accurate on average, wrong on specifics. New properties run 35-40%; older properties or high-tax areas run 55-60%. Always verify with real numbers.
5
It Excludes Mortgage
Critical: the 50% applies only to expenses, not the mortgage. The mortgage payment is calculated separately from the loan terms and subtracted from NOI.
6
When to Trust It
The 50% rule is most accurate for 1-4 unit residential properties in typical markets with standard expenses. It's less reliable for short-term rentals, commercial, or high-tax/low-tax markets.

The 50% Rule is a quick-estimation tool: operating expenses on a rental property typically run about 50% of gross rent. Subtract your mortgage payment from the remaining 50% to estimate cash flow.


Example: $1,400/month rent. 50% = $700 estimated expenses. $700 remaining minus $800 mortgage = negative $100 cash flow. This suggests the deal likely doesn't work at this price and rate without higher rent.


The 50% rule is conservative by design -- it tends to overestimate expenses on newer properties and underestimate on older ones. It's best used as a first filter to quickly eliminate bad deals, not as a substitute for detailed underwriting.

📄 Email My Report

Full analysis sent free to your inbox.