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.
Iowa guide
Iowa is where the Midwest thesis gets tested hardest, because Iowa has the cheapest houses and one of the most expensive insurance markets in the country that has never seen a hurricane.
The statewide median is $250,000. The average homeowners premium is $2,906 a year at $300,000 of dwelling coverage — and NerdWallet, quoting at a higher tier, describes Iowa as running roughly 51% above its national average. On the worked example below, insurance ($2,906) and property tax ($3,275) land within $369 of each other. Neither dominates. Together they are 28.62% of gross rent.
That is the Iowa shape: no single villain, two large bills, and a cheap purchase price that does not carry itself as easily as the price suggests. And there is a second, subtler trap here that the Florida version of this article never has to deal with — the naive check passes. Rent covers principal, interest, taxes and insurance with $37.48 to spare. Section 4 is about why that is not the same as making money.
A note before you start: this is general educational information about how rental property arithmetic works in Iowa. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Iowa property tax is administered county by county with locally set levies and a state rollback that changes annually, and insurance is priced per structure. Talk to an Iowa CPA about tax treatment, a licensed Iowa insurance agent about a real quote, and an Iowa real estate attorney about anything contractual.
The statewide median sale price is $250,000 (Houzeo live-MLS data, described as up 4.17% year over year). A secondary Redfin-derived read puts it at $244,600; the two are close enough that the range does not change any conclusion below.
Read the full Iowa guide →20 min read · Updated 2026-08-28