Investment Property Calculator: Real Numbers for USA in 2026
The real estate "get rich" narrative rarely includes vacancy rates, property management fees, capital expenditure reserves, and the opportunity cost of the down payment. Here is the full picture.
Use our [Real Estate ROI Calculator](/calculators/finance/real-estate-roi-calculator) to model your specific property with all expenses factored in.
Cap Rate by City (2026)
Cap rate = Net Operating Income / Property Value
| City | Avg Cap Rate | Median Home Price | Annual NOI |
|---|---|---|---|
| Detroit, MI | 8.5% | $85,000 | $7,225 |
| Cleveland, OH | 7.8% | $105,000 | $8,190 |
| Memphis, TN | 7.2% | $165,000 | $11,880 |
| Indianapolis, IN | 6.5% | $198,000 | $12,870 |
| Dallas, TX | 5.5% | $365,000 | $20,075 |
| Phoenix, AZ | 5.2% | $390,000 | $20,280 |
| Atlanta, GA | 5.8% | $325,000 | $18,850 |
| Nashville, TN | 5.0% | $415,000 | $20,750 |
| Denver, CO | 4.8% | $510,000 | $24,480 |
| Austin, TX | 4.5% | $535,000 | $24,075 |
| Los Angeles, CA | 3.8% | $760,000 | $28,880 |
| New York, NY | 3.5% | $650,000 | $22,750 |
The Real Cash-on-Cash Return: A Full Example
$350,000 rental home in Atlanta, 25% down ($87,500):
| Item | Monthly | Annual |
|---|---|---|
| Gross Rent | $2,100 | $25,200 |
| Vacancy (8%) | -$168 | -$2,016 |
| Property Management (10%) | -$210 | -$2,520 |
| Property Tax (1.1%) | -$321 | -$3,850 |
| Insurance | -$125 | -$1,500 |
| Repairs/CapEx (5%) | -$105 | -$1,260 |
| Mortgage (7%, 30yr, $262,500) | -$1,747 | -$20,964 |
| Net Cash Flow | -$576 | -$6,910 |
Cash-on-cash return: negative. This is not unusual for properties bought at current prices with 7%+ mortgage rates.
The Real Profit: Appreciation + Principal Paydown
The cash flow is only one component:
- Appreciation (avg 3-5%/year): $350,000 x 4% = $14,000/year in equity
- Principal paydown: ~$3,000/year in year 1 at 7%
- Tax deductions: depreciation (~$12,727/year) saves $2,800+/year at 22% bracket
Total annual wealth creation: ~$18,800 despite negative cash flow.
But compare to S&P 500 alternative: $87,500 invested at 10% nominal = $8,750/year with zero management hassle.
Use our [S&P 500 vs Real Estate Calculator](/calculators/finance/sp500-vs-real-estate-usa-calculator) to compare both paths with your specific numbers. Also see [REIT vs Direct Property](/calculators/finance/reit-vs-direct-property-usa-calculator) for a hands-off real estate alternative.