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.
Texas guide
Texas is the state people name first when they say they want to buy a rental. No state income tax, a growing population, landlord-friendly reputation, and houses that still cost less than the coasts. All of that is true.
What is also true is that Texas replaces the income tax with a property tax, and it carries the highest or near-highest homeowners insurance in the country. Those two bills arrive every year whether the house is rented or not, and on a typical Texas rental they consume roughly four out of every ten dollars of rent you actually collect. Nothing else in the analysis matters as much.
This article works one property all the way through the arithmetic, using the same figures the site's calculators use. Where a number is an assumption rather than data, it says so in plain language.
A note before you start: this is general educational information about how rental property arithmetic works in Texas. It is not investment, tax, or legal advice, it is not a recommendation to buy or not buy anything, and it does not account for your income, your other holdings, your tax position, or your risk tolerance. Property tax rates are set by hundreds of individual taxing units and change every year; insurance is priced per property. Talk to a Texas CPA about the tax treatment, a licensed Texas insurance agent about the premium, and a Texas real estate attorney about anything contractual.
The statewide median sale price is $345,000 (Texas Real Estate Research Center at Texas A&M, June 2026, corroborated by Redfin at $347,911). County figures are more useful for an investor, because Texas is enormous and internally very different:
Read the full Texas guide →19 min read · Updated 2026-08-28