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.
Massachusetts guide
Massachusetts has the lowest effective property tax rate of any state in this series — 1.00% — and it produces a $6,900 annual tax bill, because the statewide median home price is $690,000, the highest in the set.
That is the whole Massachusetts lesson in one sentence. A low rate on an expensive house is not a low bill, and an effective rate is a ratio that tells you nothing at all until you multiply it by a price.
The binding constraint here is price, and price shows up everywhere: in the $172,500 down payment, in the $196,650 of cash you need at closing, in the $4,169.88 a year that a single point of mortgage rate costs — the largest rate sensitivity in this seven-state series — and most of all in the gap between what the property earns and what it needs. The assumed rent below is 0.49% of purchase price per month. Breakeven is 0.83%. That is the widest gap in the series.
And then there is the coast, where Massachusetts is genuinely unlike anywhere else in the country: the FAIR Plan writes a third of the Cape and Islands market, and on the Cape it is frequently the cheapest policy a buyer can actually get rather than the most expensive.
If you take one thing from this article: in Massachusetts, run the arithmetic on the price, not the rate — and if you are anywhere near salt water, get the deductible schedule before you get the inspection.
A note before you start: this is general educational information about how rental property arithmetic works in Massachusetts. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Massachusetts property tax is assessed and levied city and town by city and town, with separate residential and commercial rates in many municipalities. Talk to a Massachusetts CPA about tax treatment, a licensed Massachusetts insurance agent about a real quote, and a Massachusetts real estate attorney about anything contractual — Massachusetts is an attorney-closing state, so you will have one.
Read the full Massachusetts guide →21 min read · Updated 2026-08-28