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See how rent from the other units offsets the monthly cost of the property you live in.
Net monthly housing cost
$492.57Estimated mortgage principal and interest of $2,492.57 plus operating costs, less $3,000 in expected rent from the other units is your remaining housing cost before income tax.
Example: illustrative $90,000 cash deposit.
Rates as of
Living in one unit while renting out the others creates two money flows: the bills for the whole property and the rent received from tenants. This calculator adds the calculated monthly principal-and-interest payment to your operating costs and subtracts the expected rent from every unit except the one you occupy. The remainder is your estimated net housing cost for the month.
Enter the purchase price and your cash deposit. Borrowing is the difference between them, and an equal deposit means a cash purchase. Buying costs and financed fees are excluded. Then enter the number of units, including your own, and choose the owner unit. The owner unit’s rent is excluded automatically, so an estimated market rent for your own home never becomes rental income in the result.
The rate starts at the Freddie Mac 30-year survey average and the term at 30 years, the loan most home buyers choose according to the CFPB; change them to your own loan terms. Use the operating-cost field for one monthly amount covering property tax, insurance, maintenance and other running costs, excluding principal and interest.
The example property costs $450,000 and has 3 units. You occupy unit 1. The monthly rents entered are $1,500, $1,400 and $1,600, with an illustrative $90,000 cash deposit, so the loan is $360,000 at the typical survey rate of 7.40% over the typical 30 years. Monthly operating costs are $1,000. The $1,500 owner-unit rent is excluded completely.
The other units contribute $3,000 together. Monthly principal and interest is $2,492.57. Adding $1,000 of operating costs and subtracting $3,000 of rent gives an estimated net monthly housing cost of $492.57. In the formula, P is the loan, r is the annual rate divided by 12 and n is the term in years times 12.
Rents should represent the monthly amounts you expect to collect, including any vacancy or nonpayment adjustment you have already made. An annual rental estimate can be divided by twelve outside this tool. The calculation does not secretly subtract a vacancy percentage.
The single costs field covers the whole property, not just the owner’s unit or the rented part. Convert annual bills to a monthly budget before combining them. Include property tax and insurance once, even if your lender collects them through escrow, along with association fees, utilities the owner pays, management and a repair budget where relevant.
The repayment model holds the nominal annual rate constant with monthly compounding. The survey behind the typical rate covers owner-occupied one-unit home purchase loans, so a loan on a building with more units may be priced differently. The calculator does not decide whether a lender treats the building as residential or commercial.
This result is a cash budget, not a Schedule E calculation. A full mortgage payment can be a cash outflow even though principal is not a rental expense deduction. Shared expenses, personal use and depreciation follow tax rules that need facts beyond this form. The IRS guidance linked below explains why personal and rental use must be separated when preparing a return.
The result does not value your own home, measures appreciation, checks a lease or establishes that creating or renting an additional unit is allowed. Local zoning, rental licensing and occupancy rules are outside this calculator.
Ask a lender for the actual repayment and eligibility conditions before treating the budget as affordable. A local property manager can help assess realistic rents and vacancy, and a qualified local advisor can check occupancy permissions, rental licensing and any rules that apply to the building.
An accountant can help allocate shared expenses and identify the tax consequences of living in part of the property. Revisit the budget when a tenant changes, repairs are planned or insurance and tax bills renew.
You live in one unit and receive rent from the others. This calculator subtracts that other-unit rent from the total monthly property costs you enter, giving an estimated net housing cost.
No. You can enter a comparison rent for that unit, but it is excluded from income. Changing the owner-unit selection changes which rent is excluded.
A price alone is not enough. Enter your cash deposit and check the typical rate and term against your own loan, so the tool can calculate monthly principal and interest. Keep that payment out of the separate operating-cost field.
Yes. A negative result means the other-unit rent exceeds the costs entered. It is a budget surplus before income tax, not a guaranteed investment profit.
Enter the rent you expect to collect on average per month after your own vacancy allowance. There is no separate vacancy percentage in this form, so no hidden allowance is applied.
