Monthly Numbers
Monthly income versus expenses on a single property — the clearest read on whether a deal pencils month to month. Underwrite the property as a business: what comes in, what goes out, and what pays you at the end.
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Every figure updates as you type — the defaults are typical Indianapolis numbers.
Does it pencil month-to-month?
Indianapolis benchmarks
$100–200
Monthly cash flow per door many investors require after full reserves
40–50%
Healthy expense ratio (operating expenses ÷ effective income, before debt)
5–8%
Vacancy assumption for Indianapolis single-family rentals
8.3%
Share of annual income one vacancy month costs on a 12-month lease
Every number in the tool above comes from these formulas — nothing hidden.
Effective income
Effective income = gross rent × (1 − vacancy rate) + other income
Vacancy turns the listed rent into the rent you actually collect. For Indianapolis single-family rentals, 5–8% is the standard assumption.
Net operating income
NOI = effective income − operating expenses (no mortgage payment)
Taxes, insurance, maintenance, reserves, and management — everything except principal and interest. NOI is the property’s income before financing.
Operating expense ratio
Expense ratio = operating expenses ÷ effective income
The fastest health check on a rental: what share of its income does the property burn to stay running? 40–50% is typical before debt.
Monthly cash flow
Cash flow = NOI − debt service
Debt service is principal and interest only. This is the number that hits your bank account every month.
Appreciation, equity paydown, and tax benefits build wealth over years — but cash flow is what keeps the property alive month to month. A rental with negative cash flow requires you to feed it; a rental with healthy cash flow feeds your reserves and then you. This model exists to tell you which one you’re buying, before you’re committed.
The discipline is simple: model the property as a standalone business. What does the business collect? What does the business spend? What’s left is what the business pays its owner — and the bank comes off the top, not from what’s "left over."
The operating expense ratio — expenses divided by effective income — is the fastest health check in rental analysis. Before debt, a well-run Indianapolis property typically operates in the 40–50% range with reserves included; the old "50% rule" of thumb says expenses eat about half of gross rent all-in, and it survives as a screen precisely because it’s roughly right.
A ratio persistently above that band means the property is fighting you: aging systems, high taxes, heavy turnover, or a rent below what the block supports. A suspiciously low ratio almost always means expenses are being underestimated — not that you found a magic property. When your model shows 30%, you’ve forgotten a category; go back and find it.
On a $150,000 30-year loan, the payment moves from roughly $805 at 5% to roughly $998 at 7% — a $193 monthly swing on the same property. That single line can flip a deal from $250 a month of cash flow to $57. This is why the interest rate input deserves more attention than any other line on the financing side.
It’s also why a rate reset at refinance is the stress test that kills quiet deals. If your loan isn’t fixed for your expected hold, rerun this model at +1% and check whether the cash flow survives the reset.
After full reserves — maintenance, capex, management, and vacancy — many investors want at least $100–200 per month per unit in Indianapolis. Below that, one surprise repair erases a year of returns; far above that usually means you found real value or you’ve underestimated expenses. Check which one before you celebrate.
A rule of thumb holding that a rental’s operating expenses — including capital items — will consume roughly half of its gross rental income over time. It’s a screen, not an underwrite: real ratios run from about 35% on newer construction to 60%+ on older homes with owner-paid utilities. Use it to sanity-check this model, not replace it.
Operating expenses divided by effective income. Before debt, roughly 40–50% with reserves included is typical for a well-run Indianapolis rental. Above 55–60% means the property burns income to stay standing; below 35% usually means the model is missing a category rather than the property being efficient.
Because something always is, eventually. Roofs last 20 years, furnaces 15–20, and water heaters 10 — and they fail on their own schedule, not yours. The reserve smooths those lumps into a monthly cost so a $6,000 roof is a plan instead of a crisis. Deals that only work with a $50 maintenance line work until the first water heater.
Yes — 8–10% of collected rent is the market price of the work, and including it does two things: it lets you compare your deal to any other investor’s honestly, and it shows you exactly what hiring a manager would cost later. If the deal only works when you work for free, that’s worth knowing on day one.
Not automatically, but the burden of proof shifts to you. Negative cash flow only makes sense with a deliberate thesis: strong expected appreciation, a documented value-add rent play, or a house hack where you’re the "tenant" absorbing the loss as your housing cost. Without one of those, negative cash flow is paying monthly to speculate — and this calculator is telling you so.
Keep a property-level P&L — rent collected, every expense by category — and compare it to this model at each year-end. The gap between the two is your education: expense ratios that run hotter than modeled mean the reserve needs raising; rents that outran the model mean you underwrote the neighborhood well. Austin’s investor clients get a yearly review against the original numbers.
These calculators are educational tools. Good underwriting still depends on accurate rents, expenses, financing, repairs, vacancy, management, and local market judgment.
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