50% Rule Calculator

About this calculator

The 50% rule is a quick screening shortcut used by real estate investors to estimate a rental property's operating expenses without building a full line-item budget: it assumes that expenses such as property taxes, insurance, maintenance, vacancy, and property management will consume roughly half of the gross rental income, leaving the other half as net operating income before any mortgage payment is subtracted.

Because it deliberately excludes debt service, the 50% rule is meant for comparing deals or sanity-checking a listing at a glance, not for a final underwriting decision — actual expense ratios vary by property age, location, and whether the owner self-manages. Investors use the resulting net operating income figure to gauge whether a property's rent can plausibly cover its mortgage and still leave cash flow. This calculator takes the monthly rent and applies the 50% rule to estimate expenses and net operating income.