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.
Utah guide
Utah looks, on the operating statement, like the easiest state in the West to own a rental in.
The average homeowners premium is $1,654 a year at $300,000 of dwelling coverage — cheap on any read. There is no catastrophe deductible convention: no hurricane exposure, no percentage wind-and-hail deductible of the kind that dominates Colorado. The effective property tax rate is 0.50%. There is no real estate transfer tax and no mortgage recording tax. On the worked example below, total operating expenses come to 37.90% of collected rent, near the bottom of the 35% to 55% band a healthy rental occupies.
Two things sit outside that picture, and both are large.
The first is an exemption question. Utah's Primary Residential Exemption removes 45% of a residence's fair market value from property taxation — only 55% is taxed — and it is the main reason Utah's effective rate is so low. Our data records that second homes, rentals, and vacant land do not qualify. If that is correct for your property, your rental's effective rate is not 0.50%; it is closer to 0.91%, and the cap rate falls by 0.41 percentage points. Section 2 works it through and tells you exactly who to ask.
The second is earthquake. It is excluded from every standard homeowners policy, bought separately, and carries a deductible of 10% to 20% of the dwelling limit. The Wasatch Fault runs under the Ogden-Salt Lake-Provo corridor, which is where most of Utah's housing is, and the USGS-backed working group puts the chance of a magnitude 6.75 or greater event there at roughly 43% within 50 years. On a realistically insured house that deductible is $38,700 to $77,400 — two to five times a full year's net operating income.
If you take one thing from this article: in Utah, the two numbers that decide a rental are both invisible on the quote you get first.
Read the full Utah guide →18 min read · Updated 2026-08-28