Temelios

50% Rule Calculator

Rough cash flow estimate without itemizing every expense.

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What it does

Estimates monthly cash flow by assuming operating expenses consume 50% of gross rent, then subtracts the mortgage payment.

Why it matters

The 50% rule is a quick sanity check. If a deal looks bad under the 50% rule, it's unlikely to survive a detailed analysis.

How to Use

  1. 1
    Enter monthly gross rent: Total rent if fully occupied.
  2. 2
    Enter monthly mortgage payment: Principal + interest only.
  3. 3
    Review estimated cash flow: 50% of rent minus mortgage. A positive number suggests the deal may be worth analyzing further.

50% Rule Calculator

Estimated Operating Expenses (50%)$1,000
Estimated Monthly Cash Flow$300

The 50% rule is a quick screen only. Always underwrite with real expense numbers.

Best Practices & Benchmarks

  • •The 50% rule is most reliable for stabilized multifamily (2–20 units). For newer SFR, actual expenses may run 35–40%; for older properties or those with deferred maintenance, expenses can exceed 60%.
  • •If a deal looks bad under the 50% rule, it almost always looks worse with real numbers — the rule is a pessimistic screen, not an optimistic one.
  • •A deal that passes the 50% rule still needs full underwriting. The 50% assumption doesn't reflect actual property taxes, insurance, and local management rates.
  • •Don't use the 50% rule for vacation rentals or short-term rentals — their expense structures (cleaning, OTA fees, furnishings) are fundamentally different.
  • •Use the 50% rule to eliminate deals quickly; use the NOI and Cash Flow calculators to actually underwrite the ones that pass.
Related Terms
50% RuleOperating ExpensesCash Flow

Want the full picture?

These calculators use your assumptions. Temelios pulls real comps and census data so your vacancy, rent, and expense inputs are grounded in reality.

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