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.
Illinois guide
Illinois is the Midwest state that looks like it should work and does not.
The houses are cheap — a $315,000 statewide median, below the national middle. Insurance is ordinary: $2,697 a year at $300,000 of dwelling coverage, roughly a third of what a Florida landlord pays. Rents in the Chicago metro are respectable. Every input a first-pass screen looks at says yes.
Then there is the property tax. Illinois's effective rate is 2.01%, second-highest in the country behind New Jersey. On that $315,000 median that is $6,331.50 a year, or $527.63 a month — more than an entire month's worth of the rent this article assumes, gone before the mortgage, and 2.35 times the insurance bill.
If you take one thing from this article: in Illinois, the property tax line is the deal. It is bigger than insurance, bigger than management, bigger than any rate you will negotiate, and unlike almost every other operating expense it does not shrink when you shop harder.
A note before you start: this is general educational information about how rental property arithmetic works in Illinois. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Illinois property tax is administered township by township and county by county with wildly varying local levies, and insurance is priced per structure. Talk to an Illinois CPA about tax treatment, a licensed Illinois insurance agent about a real quote, and an Illinois real estate attorney about anything contractual — Illinois is a de facto attorney-closing state and you will have one anyway.
The statewide median sale price is $315,000 (Illinois REALTORS closed-sale statistic, March 2026, up 6.8% year over year). That figure is genuinely disputed: Houzeo's live-MLS series reads $375,000, a 19% gap that looks like a different measurement basis rather than a different answer. Treat the true statewide number as somewhere in a $315,000 to $375,000 band and use the actual comparable sales for your submarket rather than either.
Read the full Illinois guide →20 min read · Updated 2026-08-28