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.
New Jersey guide
Everyone who writes about rental property in a hurricane state eventually writes the same sentence: the property tax rate looks fine, and then the insurance bill eats the deal. New Jersey is that sentence run backwards.
The average New Jersey homeowners premium is $1,367 a year at $300,000 of dwelling coverage — genuinely inexpensive, well under half what Florida charges. And then the state applies a 1.89% effective property tax rate, the highest in the country, which on the $550,000 statewide median is $10,395 a year. Property tax here is 7.6 times the insurance bill, and it consumes 27.07% of gross scheduled rent on the example worked through below.
That 27.07% figure is worth sitting with. It is almost exactly the share that Florida's $8,471 average premium consumes on a Florida rental. Same wound, different weapon.
If you take one thing from this article: in New Jersey, the property tax bill is the deal. Not the price you negotiate, not the rate you get quoted, not the management fee. Compute the tax from the purchase price before you do anything else.
A note before you start: this is general educational information about how rental property arithmetic works in New Jersey. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. New Jersey property tax is assessed and levied municipality by municipality — there are more than 560 of them — and the statewide effective rate used here is an average, not your bill. Talk to a New Jersey CPA about tax treatment, a licensed New Jersey insurance agent about a real quote, and a New Jersey real estate attorney about anything contractual.
The statewide median home price is $550,000. That is a high entry point by national standards and it is the second constraint on this market, behind the tax rate.
Read the full New Jersey guide →21 min read · Updated 2026-08-28