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50% Rule Calculator

A quick expense screen using the classic 50% rule heuristic.

Parcel Platform
Mar 4, 2026
50% Rule Calculator
Rent $2,500/mo • 50% expenses
Estimated OpEx (monthly)
$1,250
Estimated NOI (monthly)
$1,125
Cash Flow (monthly)
$1,125
Effective Income (monthly)
$2,375

This is a rule-of-thumb estimate. Replace it with real expenses as soon as you have quotes and property-specific numbers.

What is 50% Rule?

The 50% rule is a real estate investing rule of thumb that estimates operating expenses at roughly 50% of gross rental income. It provides a quick way to screen deals before diving into detailed analysis.

Formula
Estimated NOI = Gross Rent × 50% | Estimated Cash Flow = NOI − Mortgage Payment

How this calculator works

The 50% rule is a quick heuristic: operating expenses (excluding the mortgage) may be around 50% of gross rent on a typical rental. It's useful for quick screening when you don't have detailed numbers yet.

What it includes
  • Estimated operating expenses
  • Estimated NOI
  • Optional simple cash flow estimate
How to use it
  1. Enter monthly rent (and any other income).
  2. Start with the default expense ratio and adjust if your market is unusually high/low.
  3. Use the results as a quick screen, then switch to a full pro forma.

FAQ

When does the 50% rule break down?
It can be off for condos with large HOAs, high-tax markets, short-term rentals, or brand-new properties with unusually low maintenance.
Does the 50% include vacancy and maintenance?
Many investors treat the 50% as “all-in operating expenses” including vacancy and reserves. If you model vacancy separately, lower the expense ratio accordingly.
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