Rates changed. Your rental math should too.
At 7.5% conventional rates in 2026, a typical rental deal looks nothing like what YouTube videos from 2021 showed you. Let me walk through what actually happens when you run the numbers on a real property.
The Setup
Take a $250,000 single-family rental in Indianapolis. Market rent sits around $1,800/month. You put 25% down ($62,500) and finance the rest at 7.5%.
Your PITI breaks down like this:
- Principal & Interest: $1,311/mo
- Property Tax (1.0%): $208/mo
- Insurance: $150/mo
- Total PITI: $1,669/mo
Looks tight already, right? It gets worse.
What Rent Actually Covers
Gross rent: $1,800/mo. But you don't keep all of it.
- Vacancy (8%): -$144
- Property Management (8%): -$144
- Maintenance (1% of value/yr): -$208
- CapEx reserves (5%): -$90
Effective rent: $1,214/mo
Cash flow: $1,214 - $1,669 = -$455/month
That's negative $5,460 per year you're paying out of pocket.
The DSCR Story
Here's where it gets interesting. Your DSCR Calculator shows a DSCR of 1.08 using P&I only. Some lenders will fund this deal. But your Rental Property Calculator shows negative cash flow because DSCR ignores taxes and insurance.
Both numbers are correct. They answer different questions.
What Actually Works in 2026
To cash flow positive at 7.5%, you need either:
- Lower purchase price (under $180K for this rent level)
- Higher rent ($2,200+ on a $250K property)
- Lower expenses (self-manage, no CapEx reserve — risky)
Use the Cap Rate Calculator to screen properties fast. Anything under 6% cap at current rates is almost certainly negative cash flow.
Check your own numbers at arvcalc.com — 30+ free calculators for rental analysis, DSCR, NOI, BRRRR, and more.
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