Investor calculator
Rental Stress Test
Start with your property's normal assumptions, then hit the numbers with the setbacks that actually happen: lower rent, longer vacancy, bigger repairs, and rising costs. Compare the base case against the stress case to decide whether the plan survives reality. Estimates only, not advice.
Base case assumptions
Base case
Stress case
The stress case includes lower rent, higher vacancy and costs, one extra month without a tenant, and a one-time repair. It is a scenario, not a prediction.
Estimates for educational and planning purposes only. Not financial, tax, legal, lending, or investment advice. The objective is to evaluate risk, not to produce an attractive return.
What it does
The deal on its worst days, not its best.
This tool compares your property's normal assumptions against a stress scenario built from circumstances that actually occur: rent at 92 percent of normal, vacancy tripling, one empty month, a surprise repair, and increases in maintenance, management, insurance, and taxes. The point is to see how much of your planned return survives reality.
What each major input means
- Base case: your normal rent, vacancy, costs, and mortgage, entered as monthly figures.
- Stress rent and vacancy: what happens in a softer market or with slower leasing.
- Months without a tenant: added lost rent on top of normal vacancy, counted over a year.
- Cost increases and the repair: the expense side of a bad year, which is when everything seems to break.
How the calculation works
The same formula, worse inputs
Both cases compute monthly cash flow as income minus vacancy minus mortgage minus operating expenses. The stress case applies your adjustments: rent falls to the stress percentage, vacancy rises, maintenance and management multiply, insurance and taxes increase, one extra month of lost rent is subtracted from the annual total, and the unexpected repair is charged once. Annual cash flow and cash-on-cash return are computed from the monthly results plus those annual items.
What the outputs mean
- Monthly cash flow: does the property still pay its way in the stress year?
- Annual cash flow and cash-on-cash: the full-year damage to your return.
- The gap between the two: how much cushion the base case actually has, which is the number that reveals risk.
Important limitations
The stress case is one scenario, not the worst possible year: prolonged vacancy, major capital failures, and market downturns can be worse. The tool also ignores appreciation, taxes, and principal paydown. Use it to size your reserves, not to predict the future.
Calculator FAQ
Common questions.
Direct answers about stress-testing, risk, and the scenarios.
Why stress-test a rental that looks profitable?
Because projected returns are built on assumptions, and assumptions are at their most optimistic before you own the property. A stress test shows whether the deal survives the normal bad luck of real estate: a soft rental market, a big repair, or a month or two with no tenant.
What if the stress case shows negative cash flow?
Then you know how much you would have to cover out of pocket in a bad year. That is exactly the information you want before buying: the deal needs reserves, a better price, or a different market to be safe.
Which scenario should I use to decide?
Neither alone. The base case shows the plan, and the stress case shows the risk. If you can live with the stress case and still hit your long-term goals, the plan has cushion. If the stress case is unaffordable, the base case is not the whole story.
Are these results a guarantee of performance?
No. Both scenarios are estimates from your inputs, for educational and planning purposes only, and are not financial, tax, legal, lending, or investment advice. Real results can be better or worse than either case.
Go deeper
Related JC Pacific investor resources.
Run the numbers first. When you are ready to look at properties, JC Pacific can help with the next step.