50% Rule Calculator
Estimate rental cash flow by assuming operating expenses take half of the rent, then compare with your actual costs.
Quick answer
The 50% rule assumes operating expenses, excluding the mortgage, take about half of gross rent. Rough cash flow = rent - (rent x 50%) - mortgage payment. Replace 50% with your actual expense ratio to test it.
50% Rule Calculator
50 is the classic rule.
Leave at 0 if your 50% already covers vacancy.
Excluding mortgage, to compare with the rule.
Estimated Expenses / Month
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Estimated Cash Flow / Year
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Estimated Cash Flow / Month
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Cash Flow with Actual Expenses
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Actual vs. Rule
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Rule vs. Actual (Monthly)
| Item | Rule estimate (₹) | Actual (₹) | Difference (₹) |
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Assumptions & method
- Operating expenses = expense ratio × gross monthly rent (50% by default). Mortgage principal and interest are excluded from the ratio.
- Vacancy loss = extra vacancy % × gross rent, deducted in addition to the expense ratio.
- Estimated cash flow = rent − vacancy loss − operating expenses − mortgage payment (P&I).
- Actual comparison uses the monthly expenses you enter in place of the rule. Vacancy and mortgage stay the same in both columns.
- Income tax, depreciation, principal paydown, one-off capital works and appreciation are not included. Annual figures are monthly × 12.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How the 50% rule works
Landlords often underestimate what it costs to run a rental. The 50% rule is a shortcut that assumes operating expenses will use about half of the rent, whatever the property. Those costs include taxes, insurance, repairs, management and vacancy, but not your mortgage payment. Take the monthly rent, remove 50% for expenses, then subtract the principal and interest payment: what is left is the estimated monthly cash flow. A 40,000 rent with a 14,000 mortgage payment leaves 6,000 a month. The tool also lets you enter your actual expenses to see how well the shortcut fits your numbers.