Frequently Asked Questions
Common questions about real estate investing and PropFiCalc
What is Cash-on-Cash return and what is a good target?
Cash-on-Cash return measures the annual pre-tax cash flow divided by your total cash invested. For rental properties, a return of 8-12% is generally considered good, while anything above 12% is excellent.
How do I calculate Cap Rate (Yield)?
Cap Rate is calculated by dividing Net Operating Income (NOI) by the property's purchase price. It represents the potential return on investment if you paid all cash, helping you compare properties regardless of financing.
What is the difference between Annuity and Serial loans?
An Annuity loan (standard mortgage) has fixed monthly payments where the interest portion decreases over time. A Serial loan has fixed principal payments plus interest, meaning higher initial payments that decrease over time. Serial loans are common in some European countries.
How do extra payments affect my investment?
Making extra principal payments reduces your loan balance faster, saving you significant interest costs and shortening your loan term. Use our 'Extra Payments' tool to simulate this.
How do I calculate break-even occupancy?
Break-even occupancy is the number of nights you must rent out to cover all expenses. Calculate it by dividing your total monthly costs by your average nightly rate.
What expenses should I include for Airbnb?
Beyond standard costs (tax, insurance), include utilities, internet, cleaning fees (turnover), platform service fees (3-15%), and supplies/consumables.
What is the 70% Rule?
The 70% rule states you should pay no more than 70% of the After Repair Value (ARV) minus repairs. This leaves enough equity to refinance and pull your cash out.
What does 'Infinite Return' mean?
Infinite return occurs when you refinance a property and pull out all (or more) of your initial capital. Since your remaining cash in the deal is $0, your return percentage becomes infinite.
Is PropFiCalc free to use?
Yes, PropFiCalc is 100% free for everyone. We believe in democratizing access to professional-grade financial analysis tools.
Is my data safe?
Absolutely. All calculations happen locally in your web browser. We do not store, save, or have access to your financial inputs.
What is a Balloon Loan?
A Balloon Loan features lower monthly payments calculated on a longer amortization schedule (e.g., 25 years), but the entire remaining balance is due at the end of a shorter term (e.g., 5, 7, or 10 years). This is common in commercial real estate.
What explains the 'Tilgung' (Repayment %)?
Common in Germany ('Tilgung'), this allows you to define the initial principal repayment as a percentage of the loan amount (e.g., 2% or 3%) rather than a fixed term. The loan term is then derived from how long it takes to pay off the loan at that rate.
How does an Interest Only loan work?
With an Interest Only loan, you only pay the interest due each month, and the principal balance remains unchanged. This maximizes cash flow but does not build equity through loan paydown. It is popular in the UK (Buy-to-Let) and for short-term investors.
What is Mortgage Recasting?
Mortgage recasting (available in the US) allows you to make a lump-sum payment toward your principal, and then the lender recalculates your monthly payments based on the new, lower balance and the remaining term. This lowers your monthly bill without refinancing.
Can I choose between a shorter term or lower payments?
Yes! In many countries (Norway, UK, Australia, EU), our 'Extra Payments' tool offers a strategy toggle. You can choose to either 'Shorten Loan Term' (pay off debt faster) or 'Lower Monthly Bill' (improve cash flow).
Why can't I shorten my term in Canada?
Canadian mortgages typically have fixed terms (e.g., 5 years) with specific prepayment rules. To keep things simple and accurate, our calculator defaults extra payments to reducing the amortization period (shortening the effective loan life) rather than recalculating the payment immediately.
Do features change based on my country?
Yes. PropFiCalc is context-aware. When you select a country (e.g., USA, UK, Norway), the calculator adapts to show relevant loan types (like Recasting for US or Interest Only for UK), tax terminologies, and extra payment logic specific to that region.