Rental Property Comparison Calculator — Compare 3 Deals Side by Side

How to Compare Rental Properties

1. Set your shared financing inputs — down payment %, interest rate, and loan term. These apply identically to all three properties so the comparison is apples-to-apples.
2. Enter Property A's purchase price, monthly rent, and combined monthly operating expenses (taxes + insurance + maintenance + management + vacancy combined).
3. Enter Property B's details. The calculator recomputes all metrics instantly as you type.
4. Optionally add Property C for a three-way comparison. Leave it blank to compare just two properties.
5. Review each column's cap rate, cash flow, cash-on-cash return, GRM, and NOI. The tool automatically highlights the winner by cash-on-cash return — the metric that best reflects actual yield on your invested capital.
6. Use the "Deep-dive your winner" link to run a full detailed analysis on the best deal with our Rental Cash Flow Calculator.

What is Cap Rate vs Cash-on-Cash vs GRM?

Cap Rate (Capitalization Rate) measures a property's unlevered income yield: NOI divided by purchase price. It is financing-independent — a $300,000 property with $20,400 NOI has a 6.8% cap rate whether you pay cash or borrow 75%. Cap rate is the universal yardstick for comparing properties across different sizes and financing structures. Higher is generally better, though cap rates vary by market — 5% is common in expensive metros, 8%+ in secondary markets.

Cash-on-Cash Return (CoC) measures the yield on the actual dollars you invest after financing: annual cash flow divided by down payment. Unlike cap rate, CoC reflects mortgage costs. In a high-rate environment, a property with a 7% cap rate financed at 7% can produce near-zero or negative cash-on-cash. CoC is the most practical metric for real-world investors because it tells you what your cash actually earns. Target: 6–10%+ for buy-and-hold.

Gross Rent Multiplier (GRM) is a quick valuation ratio: purchase price divided by annual gross rent. A GRM of 10 means you're paying 10 years of gross rent for the property. Lower GRM signals better income relative to price. GRM under 10–12 is typically favorable for residential rentals. It ignores expenses and financing — use it for fast screening, not final decisions.

NOI (Net Operating Income) is annual rent minus annual operating expenses, before mortgage payments. It is the foundation of all other metrics and the number lenders use to evaluate investment property income.

Which Metric Matters Most?

For most buy-and-hold investors, cash-on-cash return is the primary decision metric because it reflects what your actual invested capital earns after all real costs including financing. Cap rate matters for comparing market values and filtering deals quickly. GRM is the fastest initial screen. When two properties have similar CoC, look at NOI trend (can rents grow?), neighborhood quality, and maintenance risk. The best deal on paper may not be the best deal in practice — but this tool gets you to the right shortlist fast.

Frequently Asked Questions

• What should I include in monthly operating expenses?
  The "Monthly Operating Expenses" field is a combined all-in figure: property tax (divide annual by 12), insurance, maintenance reserve, property management fee, and vacancy allowance. A common rule: budget $500–$900/month for a typical single-family rental in the $200k–$350k range, depending on local taxes and whether you self-manage. Start with 40–50% of monthly rent as a quick estimate for total expenses.
• Why does cash-on-cash differ so much between similar properties?
  Small differences in price or rent have an outsized impact on CoC because the calculation is levered — you only put down 20–25% but the mortgage cost is fixed. A property that rents for $200/month more at the same price can easily add 4–5% to cash-on-cash return. This is why rent-to-price ratio matters so much — slightly better ratios compound significantly through leverage.
• Can a property have a good cap rate but bad cash-on-cash?
  Yes, and this is common when interest rates are high. If a property has a 6% cap rate but you're borrowing at 7%, the mortgage costs more than the property earns — producing negative cash flow despite a reasonable cap rate. This "negative leverage" scenario is why many investors found deals unfeasible in 2023–2024. The comparison tool makes this visible instantly.
• What GRM is considered good for a rental property?
  GRM under 10 is generally excellent for residential rentals (strong rent-to-price ratio). GRM of 10–14 is good to acceptable. GRM of 14–18 is marginal — scrutinize expenses carefully. GRM above 18 is high and typically indicates a thin or negative cash flow property. In expensive coastal markets (NYC, SF, LA) GRM of 20+ is common — these markets are speculation-on-appreciation plays, not cash flow deals.
• Should I use the same down payment for all properties when comparing?
  Yes — holding financing constant is the correct way to compare properties on an apples-to-apples basis. Changing the down payment would artificially make some deals look better. Once you identify the winning property, you can model different financing scenarios in detail using the full Rental Cash Flow Calculator.
• What if Property C columns show dashes?
  Property C requires both a purchase price and monthly rent greater than zero to compute metrics. Leave it blank to compare just two properties — dashes indicate no data, not zero. The winner logic only considers properties with valid (non-zero price and rent) inputs.
• Is this tool appropriate for multi-family properties?
  Yes. Enter the total purchase price, combined monthly rent from all units, and combined monthly operating expenses. The math is identical — the comparison works for duplexes, triplexes, and small apartment buildings as well as single-family rentals. For BRRRR deals (buy-rehab-rent-refinance), use our BRRRR Calculator instead.