Landlord Profit Calculator (Rental Income and Tax)

A rental can show a cash profit and a tax loss in the same year, or the other way round, because the tax rules and your bank account treat the mortgage and the building differently. This calculator builds a simple yearly profit and loss: collected rent, operating costs, mortgage payments, then the federal tax view with mortgage interest and depreciation, so you can see both the cash you keep and the tax you may owe.

How to use this tool

1. Enter the monthly rent, any other income and a vacancy allowance.
2. Fill in yearly property tax, insurance and repairs, plus management, HOA and other monthly costs.
3. Enter your monthly mortgage payment and the interest part for the year.
4. Enter depreciable building basis without land and the tax rate; override depreciation when your actual annual deduction differs.

Formula

NOI = collected income − operating expenses
Cash profit = NOI − mortgage payments
Taxable income = NOI − mortgage interest − annual depreciation

Collected income is rent plus other income minus vacancy. Principal repayment is not an expense for tax, but it is cash leaving your account, so cash profit and taxable income differ by principal and depreciation.

Example

Rent of $2,400 with 5% vacancy brings in $27,360. Property tax ($3,600), insurance ($1,500), repairs ($2,000), 8% management ($2,188.80) and $100 a month of other costs total $10,488.80, leaving NOI of $16,871.20. After $15,600 of mortgage payments the cash profit is $1,271.20 a year ($105.93 a month). For tax, $13,200 of interest and $9,090.91 of depreciation on a $250,000 building turn that into a tax loss of $5,419.71, so this model estimates no income tax on that rental profit.