Turnkey Rental Calculator Guide
The Turnkey Rental calculator helps you analyze traditional buy-and-hold rental properties. These are properties that are move-in ready with minimal rehab needed—perfect for passive investors seeking stable cash flow.
What is Turnkey Investing?
Turnkey properties are fully renovated, tenant-ready rentals that you can buy and immediately start collecting rent. Unlike BRRRR or flipping, turnkey investing focuses on:
- Immediate cash flow - No rehab waiting period
- Lower risk - Property is already stabilized
- Passive income - Minimal hands-on work required
- Predictable returns - Steady, long-term appreciation
Key Input Fields
Purchase Details
| Field | Description | Tips |
|---|---|---|
| Purchase Price | Property purchase price | Total acquisition cost |
| Monthly Rent | Expected rental income | Verify with local comps |
| Down Payment % | Your cash investment | Typically 20-25% |
| Interest Rate | Mortgage interest rate | Get pre-approved rates |
| Loan Term | Length of mortgage | 30 years typical |
| Closing Costs | Transaction costs | 2-4% of purchase price |
Minor Rehab (Optional)
Even turnkey properties may need minor work:
- Simple Mode: Enter a lump sum estimate
- Detailed Mode: Itemize repairs with quantities
- Contingency: 10% buffer added automatically
Operating Expenses
| Field | Description | Guidelines |
|---|---|---|
| Annual Taxes | Property tax | Check county assessor |
| Monthly Insurance | Landlord insurance | $80-150/month typical |
| CapEx/OpEx Reserve % | Maintenance reserve | 5-10% of rent |
| Vacancy % | Expected vacancy | 5-8% typical |
| Management % | PM fee (if applicable) | 8-10% of rent |
Understanding Results
Quick Screening Metrics
These help you quickly filter deals:
-
1% Rule: Monthly rent ÷ Purchase price
- 1%+ = Strong candidate
- 0.8-1% = Worth analyzing
- Under 0.8% = Likely poor cash flow
-
Gross Rent Multiplier (GRM): Purchase price ÷ Annual rent
- Lower is better
- Under 10 = Good for rentals
- Over 15 = Premium market (harder to cash flow)
Cash Flow Analysis
- Monthly Cash Flow: Rent - PITI - Reserves
- Annual Cash Flow: Monthly × 12
- Total Investment: Down payment + Closing costs + Rehab
Return Metrics
| Metric | Formula | Good Target |
|---|---|---|
| Cash-on-Cash | Annual Flow ÷ Total Investment | 8%+ |
| Cap Rate | NOI ÷ Purchase Price | 6%+ |
| DSCR | NOI ÷ Debt Service | 1.25+ |
The 1% Rule Explained
The 1% Rule is a quick screening tool:
Monthly Rent ≥ 1% of Purchase Price
Example: A $200,000 property should rent for at least $2,000/month.
Why it works: Properties meeting the 1% rule typically cash flow after expenses. It's not perfect, but it quickly filters out overpriced properties.
Limitations:
- Doesn't account for taxes, insurance, or local factors
- Harder to achieve in expensive markets
- Not a replacement for full analysis
Cap Rate vs Cash-on-Cash
These are different but complementary metrics:
Cap Rate (Capitalization Rate)
- Measures the property's inherent return
- Ignores financing—as if you paid all cash
- Formula: NOI ÷ Purchase Price
- Use for: Comparing properties, market analysis
Cash-on-Cash Return
- Measures YOUR return on invested capital
- Includes financing leverage
- Formula: Annual Cash Flow ÷ Total Cash Invested
- Use for: Evaluating your actual investment return
Key insight: Leverage amplifies returns. A property with 6% cap rate might yield 12%+ cash-on-cash with good financing.
Deal Quality Assessment
reSniper rates turnkey deals based on:
🟢 Great Deal
- Cash-on-Cash ≥ 10%
- Cap Rate ≥ 7%
- DSCR ≥ 1.25
- Positive monthly cash flow
🟡 Good Deal
- Cash-on-Cash 6-10%
- Cap Rate 5-7%
- DSCR ≥ 1.10
🟠 Marginal Deal
- Minimal cash flow
- DSCR barely above 1.0
- Market may appreciate
🔴 Pass
- Negative cash flow
- DSCR below 1.0
Example Analysis
Property: 3BR/2BA single-family rental
| Input | Value |
|---|---|
| Purchase Price | $180,000 |
| Monthly Rent | $1,500 |
| Down Payment | 25% ($45,000) |
| Interest Rate | 7.25% |
| Closing Costs | $5,400 |
| Annual Taxes | $2,400 |
| Monthly Insurance | $120 |
Quick Metrics:
- 1% Rule: $1,500 ÷ $180,000 = 0.83% (below 1%)
- GRM: $180,000 ÷ $18,000 = 10
Cash Flow:
- Monthly P&I: $921
- PITI: $921 + $200 + $120 = $1,241
- Reserves (10%): $150
- Cash Flow: $1,500 - $1,241 - $150 = $109/mo
Returns:
- Annual Cash Flow: $1,308
- Total Investment: $45,000 + $5,400 = $50,400
- Cash-on-Cash: 2.6% (below target)
- Cap Rate: 5.7%
Assessment: This deal has positive cash flow but low returns. Consider negotiating price down or finding a higher-rent property.
Tips for Turnkey Success
- Verify the rent - Don't trust seller estimates; check Rentometer and local listings
- Inspect thoroughly - "Turnkey" doesn't mean maintenance-free
- Factor in management - Even if self-managing, price it in for flexibility
- Consider appreciation markets - Lower cash flow can be offset by growth
- Build reserves - 6 months of expenses minimum before buying
When Turnkey Makes Sense
✅ Good for:
- Out-of-state investing (less hands-on)
- First-time investors (simpler execution)
- Time-limited investors (no rehab project)
- Stable cash flow priority
❌ Consider alternatives if:
- Seeking higher returns (try BRRRR)
- Have rehab skills (add value through renovation)
- Market has no inventory (consider off-market deals)
Related Guides
- BRRRR Calculator - Higher returns, more work
- Glossary - Cap Rate, DSCR, GRM explained
- Portfolio Tracking - Monitor your rentals