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.
Pennsylvania guide
Some states have one number that decides everything. Florida has its insurance premium. New Jersey has its property tax rate. Pennsylvania has neither, and that is precisely what makes it useful.
The effective property tax rate is 1.30% — above the middle, well below New Jersey's 1.89%. Insurance averages $1,365 a year at $300,000 of dwelling coverage — a little below the national middle. The median home price is $340,000 — comfortably affordable by Northeastern standards. There is no coastal wind exposure, no percentage hurricane deductible in ordinary use, and no single line item you can point at and say that is why the deal works or doesn't.
Which means the method decides it. And Pennsylvania supplies the sharpest illustration of that anywhere in this series. Take the Allegheny County example worked through in Section 5: principal, interest, taxes and insurance total $1,595.21 a month against an assumed $1,600 rent. The rent covers the mortgage. The naive check passes — by $4.79 a month.
Run the same house properly and it loses $430.41 a month.
If you take one thing from this article: in a moderate state, the difference between a good deal and a bad one is entirely in how you count. Nothing will jump out at you. You have to go looking.
A note before you start: this is general educational information about how rental property arithmetic works in Pennsylvania. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Pennsylvania property tax is levied by county, municipality, and school district separately, and transfer tax rates are set locally on top of the state rate. Talk to a Pennsylvania CPA about tax treatment, a licensed Pennsylvania insurance agent about a real quote, and a Pennsylvania real estate attorney about anything contractual.
Read the full Pennsylvania guide →21 min read · Updated 2026-08-28