50% Rule Calculator

Rule of thumb: operating expenses ≈ 50% of gross rent. Quick NOI estimator.

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How to use this calculator

  • Enter gross monthly rent.
  • Enter monthly mortgage P&I.
  • Read estimated cash flow.

About this calculator

The 50% rule says total operating expenses average 50% of gross rent over the long run. This is rough but surprisingly stable across many markets: taxes (1-2% of price annually), insurance, vacancy (5-8%), maintenance (5-10% of rent), management (8-12% if outsourced), capex reserve (5-10%). Use to quickly estimate NOI without itemizing every expense.

Frequently asked

Is 50% always right?+
No — it's an average. New construction with no capex coming has lower opex; old properties with high taxes have more. Treat as a starting estimate, refine with actual numbers.
Does 50% include mortgage?+
No — mortgage is separate. The 50% covers operating expenses only (taxes, insurance, vacancy, maintenance, management, capex).
What about utilities?+
If tenants pay them, exclude. If landlord pays (multifamily commonly does), include in opex.
When is 50% wrong?+
Class-A new construction (often 30-40% opex). Class-C in high-tax states (sometimes 60%+). Always run real numbers before committing.
How does 50% compare to my actual operating ratio?+
After 12 months of ownership you'll have actual opex / actual income. Most investors find 40-60% range, with 50% as a good plug estimate.

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Research Informed Consent Form (Common Rule)
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Informed consent for human-subjects research compliant with 45 CFR § 46.116 (Revised Common Rule, 2018) — includes key information section, risks/benefits, IRB contacts.