Rental yield · Cash-on-cash · Flip potential · AI analysis
Most rental calculators ask for the purchase price, the expected rent, and the mortgage, then show a yield. Those three numbers cannot tell you whether an investment works, because they leave out everything that makes one fail.
The calculator above includes the following, because leaving them out is how a property that loses money every month looks profitable in a spreadsheet:
California is a high-price, comparatively low-yield market. Judging a property here by gross yield alone will either talk you out of every deal or into a bad one. Net cash flow tells you whether you can hold it. Total return — cash flow plus principal paid down plus any appreciation — tells you whether holding it was worth doing. Those are different questions and a single yield figure answers neither.
Gross yields in most Californian metros are low by national standards — high purchase prices relative to achievable rent are the defining feature of the market. That is why cash flow matters more here than yield: a property can show a respectable yield on paper and still cost you money every month once the real costs are in. Judge a California rental on net cash flow and total return including appreciation, not on gross yield alone.
Gross yield is annual rent divided by purchase price — useful for a first filter and nothing else, because it ignores every cost. Net yield subtracts running costs: tax, insurance, management, maintenance, vacancy. Cash-on-cash return divides annual cash flow after the mortgage by the cash you actually put in, which is the number that tells you what your money is doing. The three can point in different directions on the same property.
Vacancy, first — no property is tenanted every week of every year, and a model assuming otherwise is wrong before it starts. Then management at roughly 8%–10% of rent if you are not doing it yourself, maintenance and capital expenditure (a roof and a boiler are not monthly costs but they are certain ones), leasing fees between tenancies, and property tax that reassesses to your purchase price on sale under Proposition 13 rather than staying at the previous owner's level.
It can, and that is a decision rather than a calculation. Negative cash flow means the property costs you money every month and you are betting the capital gain will more than repay it. That bet has often paid in California and is not guaranteed to. The honest framing is that you are funding a leveraged position on house prices out of income — reasonable if you have chosen it deliberately and can sustain it, dangerous if you assumed the rent would cover things.
Depreciation is a genuine benefit for US residential investors and this calculator does not model it, because the effect depends on your marginal rate, how the purchase is structured, and rules that change. Treat the figures here as a pre-tax view of the property itself, then take that to an accountant. Any tool claiming to give you an after-tax return without knowing your circumstances is guessing.
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KindHome is not a licensed brokerage, lender, tax adviser or investment adviser. This is general information about how these costs work, not advice about a specific property or your circumstances.