Rental property calculator: cap rate, cash flow and cash-on-cash return
This calculator uses only what you type in. It does not know Alaska rents, tax rates, utility costs or interest rates, so every one of those fields starts blank. Results are an educational estimate before income taxes, not a prediction of what a property will earn.
The purchase
The price you are considering. For recent sales nearby, see the multifamily table in our investing guide.
From your lender's Loan Estimate or your own estimate.
Work needed before the first tenant moves in.
Use the down payment your lender requires for an investment property, which can differ from a home you live in.
Enter the rate a lender quoted you. We do not publish rates.
Income
Use signed leases, the seller's rent roll or your own research. We do not estimate rent.
Laundry, storage or garage rent, if any.
The share of rent you expect to lose to empty months and unpaid rent.
Operating expenses
From the current tax bill or the borough or city assessor.
A landlord or rental dwelling policy quote.
Natural gas, heating oil, propane or electric the owner pays. Ask the seller for 12 months of bills, winter included.
If the owner pays them. Wells and septic systems have their own upkeep.
Plowing, sanding, roof snow and summer yard work you will pay for.
Percent of rent collected.
Percent of rent collected, set aside for roofs, boilers, water heaters and flooring.
Percent of rent collected. Use 0 if you manage it yourself.
Accounting, licenses, pest control, anything else.
Cash flow here is before income taxes and depreciation. Ask a CPA how those apply to you.
The formulas behind each number
These are the standard formulas investors and lenders use. Knowing them helps you check a seller's flyer or a listing's "pro forma" numbers yourself.
Net operating income
Yearly rent and other income, minus vacancy, minus operating expenses. Loan payments are not an operating expense, so NOI is the same whether you pay cash or borrow.
Capitalization rate
NOI divided by the purchase price. It compares properties as if each were bought with cash. A cap rate is only as good as the rent and expense figures behind it.
Cash flow before taxes
NOI minus yearly principal and interest. It is what is left before income taxes, depreciation and any big repair the reserves do not cover.
Cash-on-cash return
Yearly cash flow divided by the cash you put in: down payment, closing costs and repairs before renting. It ignores loan paydown and any change in the property's value.
Debt service coverage ratio
NOI divided by yearly principal and interest. Lenders on investment loans look at this ratio, and each sets its own minimum. Our DSCR loan guide explains the two ways lenders figure it.
Break-even occupancy
The share of full rent you must collect to cover fixed expenses and the loan payment. Percent-of-rent costs such as management are scaled to the rent you collect. Above 100% means the rent cannot cover the costs.
These three returns can disagree on the same property. Cap rate ignores the loan, so two buyers with different down payments will see the same cap rate and different cash-on-cash returns. DSCR can look strong on rent alone and still leave thin cash flow once heat, snow and reserves are included. Use all of them, not just the number on a flyer.
The payment uses the standard fixed-rate amortization formula, the same one in our Alaska mortgage calculator. The gross rent multiplier is the price divided by one year of scheduled rent, and the operating expense ratio is expenses divided by rent collected.
Expenses that are easy to miss on an Alaska rental
The expense fields above include a few lines that matter more here than in many other states. Get real figures for each one on the property you are looking at, not an average.
Heat and utilities
Find out who pays for heat in each unit and how it is metered. Some plexes heat every unit from one boiler, which puts the whole heating bill on the owner. Ask for 12 months of gas, heating oil, propane and electric bills so the winter months are included. Our cost of living guide links the official utility tariffs.
Snow and roofs
Budget for plowing the driveway and parking, sanding and, on some roofs, shoveling. Ask who maintains the road and the driveway, and whether a road service area or a road association bills for it.
Water, sewer, wells and septic
Many Mat-Su Valley and Kenai Peninsula rentals use a private well and septic system. Plan for testing and pumping, and read our well and septic guide before you write an offer.
Property taxes
Property tax is set by the borough, the city and any service areas, so two rentals a few miles apart can have very different bills. A mill is $1 of tax per $1,000 of taxable value. The official 2026 mill-levy table lists a City/Anchorage tax-district total of 15.57 mills; other Anchorage districts differ. The Mat-Su Borough's adopted FY27 areawide rate is 7.955 mills and does not include city or service-area levies. Use the property's current tax bill, not a district average. Official lookups: Anchorage 2026 mill-levy table, Anchorage parcel search, Mat-Su FY27 budget, Mat-Su myProperty, Mat-Su Borough and Kenai Peninsula Borough.
Insurance
A landlord or rental-dwelling policy is not the same as a primary-home HO-3 policy. Ask for a quote on the actual use, including vacant units or short-term rental use if that is the plan. Older boilers, fuel tanks, wells and septic systems can change what a carrier will write. We do not publish typical premiums.
Vacancy and capital reserves
The vacancy field is the share of scheduled rent you do not expect to collect. The capital-reserve field is a share of rent collected that you set aside for roofs, boilers, water heaters and flooring. This calculator subtracts both when it figures NOI. We do not publish a standard percentage; use figures that fit the leases and the age of the systems, and ask a lender how it treats reserves.
Need help with leasing or management after you buy? We can connect you with a trusted local property manager.
Records to ask the seller for
Rent and expense figures on a flyer are the seller's numbers. These records let you check them. Ask for them in writing, and make your offer contingent on reviewing them if you can.
- Current leases for every unit, with start and end dates
- A rent roll showing rent, deposits held and any late payments
- 12 months of utility bills the owner pays, including winter
- The current property tax bill and insurance declarations page
- Repair and maintenance invoices for the last two years
- Ages of the roof, boiler or furnace and water heaters
- Permits for any added or converted units
- Well and septic records, if the property has them
Existing leases and the security deposits held under them have to be accounted for at closing. Alaska's Uniform Residential Landlord and Tenant Act (AS 34.03) sets the rules for deposits and leases. The Alaska Department of Law's landlord and tenant handbook explains the basics. An Alaska attorney can answer questions about a specific lease.
Need help with leasing or management after you buy? We can connect you with a trusted local property manager.
Investing with your VA loan
If you will live in one unit of a one- to four-unit property, a VA-backed purchase loan may apply. VA often requires no down payment when you have full entitlement and the price is not above the appraised value, and the occupancy rule is about your intent when you buy. If you later move, including on PCS orders, VA does not require you to sell. Run this property's bills in the calculator the same way you would on any rental. Basic Allowance for Housing is a housing allowance, not rent from a tenant.
Our investing guide walks through occupancy, remaining entitlement and how lenders may treat rental income, with official VA sources. James and Ryan work with Veterans and military families on these purchases.
Get listings and records help from James or Ryan
No pop-ups and no automatic sign-ups. Use the contact form when you want help finding a property or checking one you have in mind.
Get a list of rentals for sale
Duplexes to fourplexes are often filed under ordinary home or commercial listings in the MLS, so a generic search misses many of them. Tell James or Ryan your areas, price range and unit count and they will set up an MLS email alert and point you to current inventory.
Investor value and rent check
Send an address or MLS number. We can pull recent comparable sales and list the leases, rent rolls and expense records to ask the seller for. You still run the numbers yourself; we do not predict rents or returns.
Talk with James or Ryan
Bring your numbers. James and Ryan can walk you through a property, pull recent comparable sales and help you plan inspections and record reviews before your deadlines.
James Cash
Broker, Keller Williams Realty Alaska Group
Works with buyers, sellers and investors across Anchorage, Eagle River and the Mat-Su Valley.
james@herorealtygroup.com
Ryan Lunski
Licensed Alaska Real Estate Salesperson
A military veteran who works with buyers, investors and military families in Southcentral Alaska.
ryan@herorealtygroup.comWe are real estate agents, not lenders, accountants or attorneys. We can help you find and compare properties, request records from sellers and plan inspections and contract deadlines. A licensed lender, a CPA or tax advisor, and an Alaska attorney answer loan, tax and legal questions. You can check any loan originator's license at NMLS Consumer Access.
Rental property calculator FAQ
What is a good cap rate for a rental in Alaska?
We do not say what cap rate is good, because it depends on the property, its condition, the rent and expense figures and your own goals. Use the calculator to compare properties on the same assumptions, and check every figure against the seller's records.
How do you calculate cap rate on a rental property?
Cap rate is net operating income divided by the purchase price. Net operating income is yearly rent and other income, minus vacancy and operating expenses such as taxes, insurance, utilities the owner pays, upkeep and management. Loan payments are not included.
What is the difference between cap rate and cash-on-cash return?
Cap rate ignores financing and compares properties as if bought with cash. Cash-on-cash return divides yearly cash flow after loan payments by the cash you actually put in, including the down payment, closing costs and repairs before renting.
Why are rent, taxes and utilities blank?
Because they vary by property and change over time. We do not publish rent estimates, mill rates, utility costs or interest rates. Use leases, bills and quotes for the property you are considering.
Does this calculator include income taxes or depreciation?
No. Results are before income taxes, depreciation and any change in the property's value. A CPA or tax advisor can explain how those apply to you. Alaska currently has no individual income tax, according to the Alaska Department of Revenue, but federal tax still applies.
How should I treat vacancy and capital reserves?
Enter a vacancy and credit-loss percentage that fits the leases and the property, and a capital reserve that fits the age of the roof, boiler and other major systems. This calculator subtracts both when it figures NOI. We do not publish a standard percentage, and some lenders treat replacement reserves differently.
Can you tell me the rent a property will get?
No. We do not estimate or predict rent. We can help you request the current leases and rent roll from the seller so you can check the figures yourself.
What DSCR do lenders want on a rental?
Each lender sets its own minimum debt service coverage ratio and its own way of figuring it. See our DSCR loan guide and ask a licensed lender for their requirements.
Can I use this calculator with a VA loan?
Yes. Enter the down payment, rate and expenses that apply to the property, including a zero down payment if that is what a VA lender quoted. If you will live in one unit of a one- to four-unit home, a VA-backed purchase loan may apply. Occupancy is required at purchase; if you later move, including on PCS orders, VA does not require you to sell. See Investing with your VA loan in our investing guide, and talk with James or Ryan.
More for Alaska investors
Guides and tools that pair with this calculator.
Where the program details came from
Checked November 13, 2026 (America/Anchorage). If an official page differs from this summary, the official page controls.
- Alaska Department of Law, Alaska Landlord and Tenant Act: What it Means to You; Alaska Statutes AS 34.03.
- Municipality of Anchorage, Read Your Tax Bill; Matanuska-Susitna Borough, Your Property Taxes; Kenai Peninsula Borough.
- Formulas: standard fixed-rate amortization and the conventional definitions of net operating income, capitalization rate, cash-on-cash return and debt service coverage ratio. No market data is used in this calculator.
- Municipality of Anchorage, 2026 Mill Levy by Tax District (AO 2026-43 and AO 2026-44): City/Anchorage total 15.57 mills; Matanuska-Susitna Borough, Assembly Approves FY27 Budget (May 8, 2026): adopted areawide mill rate of 7.955.
- Alaska Department of Revenue, Personal Income Tax.
- U.S. Department of Veterans Affairs, VA-backed purchase loan and VA Lender's Handbook, Pamphlet 26-7.
KELLER WILLIAMS REALTY ALASKA GROUP
Properties of Alaska by HERO Realty Group
A team at Keller Williams Realty Alaska Group, 621 S Knik Goose Bay Rd, Wasilla, AK 99654 · Office 907-360-7448
Properties of Alaska is a real estate team, not a mortgage lender or loan originator. Information on this page is general education, not a loan offer, a commitment to lend or financial, tax or legal advice.
Each office is independently owned and operated.
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