50 Percent Rule Calculator

About this calculator

The 50 percent rule is a quick screening tool real estate investors use to sanity-check a rental property before running a full underwriting: it assumes operating expenses — property taxes, insurance, maintenance, vacancy, management and repairs, but excluding mortgage principal and interest — will consume roughly half of the gross rental income over time. Net operating income (NOI) is then estimated simply as monthly rent times 0.5.

Subtracting the mortgage payment (principal and interest) from that estimated NOI gives a rough monthly cash flow figure, letting an investor reject an obviously unprofitable deal in seconds rather than building a full expense worksheet for every listing they consider. It is intentionally approximate — actual expense ratios vary by property age, location and management style — so it is meant as a first filter, not a substitute for detailed due diligence before closing.

This calculator takes your monthly rent and mortgage payment and applies the 50 percent rule to estimate expenses, NOI and resulting cash flow.