Cap rate, real cash flow, and return on the cash you put in — including the expenses most analyses leave out. Estimate only, not investment advice.
Estimates only — not investment, tax, or legal advice. How we calculate every figure
Estimated all-in monthly payment for a home price you have in mind.
What homeowners insurance costs in your state, and whether what you pay is out of line.
Income, savings, and debts in — max home price and qualification signal out.
A rental bought for $300,000 and sold seven years later for $394,780 nets $158,925 at closing — and owes about $24,753 of federal tax, $15,273 of it on depreciation you were required to take. Here is the math, why a sale with zero appreciation still owes tax, and the three clocks a fourth-quarter sale starts.
A leveraged rental makes money three ways and cash flow is only one of them. Here is what the other two are worth — and why the structure that maximises them is a bet, not a plan.
How to verify one specific rental deal: audit the seller's pro-forma line by line, comp a real rent, reassess the tax, age the systems, and price the offer the numbers actually support.
Set up basis correctly, claim the depreciation you are owed, survive the passive-loss rules, and know what the sale will cost — with every figure tied to the statute.
Colorado guide
Colorado's effective property tax rate is 0.51%, which puts it among the seven to ten lowest in the country. The state's residential assessment ratio is only 6.8% to 7.05% of actual value, and that is the reason. It is a real advantage and it is worth having.
It is also smaller than the insurance bill. On the $563,000 statewide median, property tax is $2,871.30 and insurance is $4,412 — 1.54 times larger, and 33.24% of every operating dollar the property spends. Insurance alone is 14.14% of gross rent.
And the premium is not even the main event. The main event is that most Colorado carriers have abandoned flat wind-and-hail deductibles and moved to a percentage of the dwelling limit — commonly 1% to 5%, with 1% to 2% prevailing and 5% showing up on older roofs. On a $300,000 dwelling limit, 2% is $6,000, and hail is by a wide margin the claim a Colorado property owner is most likely to file. That is 38.88% of a full year's net operating income, payable in a single afternoon, and there is no lawful way to make a contractor absorb it.
If you take one thing from this article: in Colorado, the deductible is the number, not the premium. The entire honest range of the statewide premium — from $3,312 to $5,511, a genuine 66% disagreement between sources — is worth 0.39 points of cap rate. One 2% deductible is worth 1.06.
A note before you start: this is general educational information about how rental property arithmetic works in Colorado. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Colorado insurance is priced per structure and per ZIP code, roof age moves it enormously, and property tax is administered county by county. Talk to a Colorado CPA about tax treatment, a licensed Colorado insurance agent about a real quote, and a Colorado real estate attorney about anything contractual.
Read the full Colorado guide →19 min read · Updated 2026-08-28